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Full Speed Ahead

Beacon Hill Pushes for A Consensus on Health Care Reform
Dr. Charles Cavagnaro

Dr. Charles Cavagnaro said the quick pace at which lawmakers are approaching heath care reform is necessary to securing federal funds.

The fast track. That’s where the Commonwealth’s health care reform efforts currently sit, only temporarily stalled after speeding toward the point at which the House and Senate must hammer out a compromise between rival plans. While it’s true that the proposals have some similarities, they also have some major differences, especially when it comes to their effect on the business community.

When reached, that compromise will go to Gov. Mitt Romney, who has forwarded his own health care reform proposal, giving lawmakers three measures from which to craft a response.

It remains to be seen what the final draft of this, the most recent attempt at reform legislation in Massachusetts will look like. But legislators hope to have a plan in place by early January ‘ an ambitious goal, given that the House and Senate approved their respective bills on Nov. 3 and 9. But time is of the essence — and it’s a big part of the story.

A plan must be in place soon if the state is to qualify for $335 million in federal funding used as both the carrot and the stick in an effort to compel states to provide health insurance for more of their residents. According to Eileen McAnneny, vice president for Government Affairs for the Associated Industries of Mass. (A.I.M.), an original deadline of March 1 was set by the Center for Medicaid and Medicare Studies (CMS), however the center recently requested that Massachusetts file its proposal by Jan. 15.

“The state and federal governments have a binding agreement that all proposals are submitted at the absolute latest by March 1,” she said, “but since that agreement was made, CMS has requested that the work be done by Jan. 15. Some would argue that the request is not legally binding, but there are millions of dollars riding on this and it is probably best to honor that request.” All states are currently working under the same federal guidelines that require health care reform packages be approved at the state level and later at the federal level, in order to receive federal dollars that have been earmarked for state health care programs by CMS. It’s also money that is necessary for most states, including Massachusetts, to put new programs into place for the coming year.

Jeffrey Ciuffreda, vice president for Government Affairs with the Western Mass. Economic Development Council, echoed McAnneny’s comments in regard to the importance of chasing those dollars. “We’re talking about matching funds for health care for all of the states,” said “It’s roughly 50 cents on the dollar that came into the picture a few years ago when the feds said the states needed to start better controlling their costs and revamping their health care systems.

“There’s some debate as to where that deadline will finally fall, but it has to be soon,” he said. “The original date was last year, but a waiver was granted to all states, so that’s why there is such a push on now.” The speed at which Massachusetts legislators have moved to craft their respective measures — not to mention individual provisions — has been cause for concern for some, who fear that a hastily drafted plan could lead to problems in the future, such as health insurance plans with high deductibles or penalization systems. In a statement issued on Nov. 1, Richard Lord, president of A.I.M., criticized the House for rushing its proposal.

“A hasty process lends itself to errors, omissions, and unnecessary confusion, particularly when we are analyzing, reviewing, and digesting a proposal of this magnitude,” he said. Later, on Nov. 9, Lord targeted the Senate, saying that A.I.M. was “disappointed that this far along in deliberations, the current Senate bill has serious shortcomings.” He went on to list several bullet points the organization had previously cited as important to a complete reform package, including a vehicle or entity to facilitate use of pre-tax dollars by individuals to purchase health insurance. Still, many, A.I.M. officials included, contend that garnering that $335 million is necessary in order to foster change in the health care system, and therefore the quick turnaround of the House and Senate bills is also essential, especially as the deadline approaches. “We recognize the pressures,” said McAnneny.

“We understand the importance of submitting these proposals soon, so we’re certainly not asking the Legislature to take its time.” Dr. Charles Cavagnaro, chief executive officer for Wing Memorial Hospital, and also a practicing physician, also underscored the importance of those federal dollars by pointing out that without them, health care reform will be delayed substantially in the future. “It is not the plan that is important now, but the funding behind it,” he said. “Without it, we can’t implement anything. That federal funding is important to the state and the legislators, and they don’t want to lose it.”

The Power of Three

The three rival health care reform initiatives have similar goals: increasing coverage to the uninsured — thus shrinking or eliminating the Uncompensated Care Pool — and streamlining the state’s health care system. All three plans, however, differ in several respects. Both the House and Senate bills followed an early, more global health care reform proposal set forth earlier in the year by the governor. That proposal included a mandate that all Massachusetts residents obtain coverage, either on their own, through a state-controlled program such as MassHealth, or through a low-cost-policy program.

It also advised improvement of the malpractice system and consumer access to health care provider quality and cost information, and increases in Medicaid reimbursement rates for providers. Both the House and Senate bills include some provisions similar to Romney’s, however they also approach several issues, particularly the uninsured population, in different ways The House bill requires that people who can afford insurance purchase it, and would increase the number of people covered by Medicaid by tapping the tobacco settlement fund (in its entirety) ‘ a figure of about $255 million a year. The House bill also mandates that busi-ness owners provide insurance for their employees or pay into an insurance fund ‘ essentially, a tax is levied on employers with 11 or more employees ‘ employers with 10 or fewer employees are exempt.
This controversial provision has drawn fire from state business groups including A.I.M. “Proponents of the new tax are characterizing it as a ‘fair-share assessment’ designed to require businesses that don’t offer health insurance to pay into our health care system. This description is patently false,” said Lord. “By providing a carve-out to really small businesses (10 or fewer employees), the bill would exempt 95% of employers that do not currently provide health insurance to their workers from this new tax, estimated to cost $700 million annually. This bill is really about asking employers of Massachusetts that already provide insurance to foot the bill for health care expansion.” Currently, only Hawaii uses a system similar to that contained in the House version, and Lord believes that such a move would hurt the Commonwealth’s already fragile economy. “Simply shifting the burden to pay for an inefficient system is not reform,” he said. “Controlling costs is the linchpin for addressing access and accountability. We must examine the way that health care is delivered in this state and begin to reshape our delivery system into a more efficient, financially viable system that can be sustained over time without sizeable new contributions from the paying public each and every year.” The Senate bill does not include such a mandate, but it does stipulate that employers who don’t pay for health insurance cover the health care costs of those workers who receive health care services.

Romney opposes the employer mandate set forth by the House, but has said he wants legislators to move quickly to reach a compromise, in order to tap $335 million in federal money to fund the finalized plan. Ciuffreda said that Romney got the ball rolling with an early set of health care reform proposals, in part to meet the deadline for acquiring those federal funds, but stepped back while the House and Senate drafted their bills. “He deserves the credit for getting this started by using the bully pulpit and fueling the fire,” said Ciuffreda. “There were three pieces to this debate and there are still many, many moving parts, but now it comes down to the House and the Senate, and the plan they’re going to decide on between them.” While Romney has steered clear of threatening a veto of any legislation that proposes mandated health insurance for employers, or penalties for those who do not provide it, Ciuffreda added that the governor is likely to enter the ring again if the provision shows up on the draft of the bill that emerges from conference committee sessions. “He’s firmly against that employer mandate, and if needed, that’s where we’re going to see him weigh in,” he said.

Drawing Distinctions

Arguably, Romney’s proposal and the Senate bill are most similar in their approach to reform. The Senate measure is considered more cautious than that of the House; Ciuffreda explained that the Senate bill lays out a plan to cover about half of the state’s uninsured over the next two years, whereas the House bill proposes that 95% of that population’s insurance needs be immediately addressed through the mandated insurance requirements.

“The Senate’s bill could be considered conservative, while the House bill is more aggressive,” said Ciuffreda. “The House is trying to take 95% of a problem and solve it, but the Senate is trying to help 50% or 60% of the uninsured population and provide assistance, then look at how the plan is working in a couple of years.

“That might mean that we have a better handle on who those people are in two or three years,” he continued, “and at that time it’s possible that an even better bill can be drafted.” Not unlike the bills themselves, the impressions of professionals in health care of the current trifecta of legislation are varied.

Cavagnaro said hospital administrators support the general concept of reform as a step in the right direction. “It’s safe to say that all hospitals are united in believing that this is something that needs to be done, but we are not as united in how that should be done,” he said. Cavagnaro noted, however, that most hospitals agree that the impetus behind each piece of legislation is a good faith effort to improve health care in Massachusetts. “In general, all three versions have merit,” he told BusinessWest. “I’m hopeful that all three parties will come to a compromise without trying to get each other’s goat. “The bottom line is the health care system is broken across the country,” he added, “and it is particularly broken in Massachusetts, so it’s clear that something needs to be done.”

Cavagnaro said the uncompensated care pool has become the crux of the issue for many of the Commonwealth’s hospitals. “For some, it is a huge burden,” he said. “It’s behind all of this legislation. Even a compromised bill would begin to address the needs of the free care pool.”

Proceeding With Caution

And, he added that the speed at which the proposals have been drafted on Beacon Hill will likely contribute to a plan that will prove to have some holes. However, Cavagnaro said it could also be a necessary risk. “It has definitely moved the discussion to a new level,” he said. “And it has put greater importance on it than has ever been there before. The attention to the matter alone is a step forward.”?

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