In the States

IN THE STATES: How Health Reform Can Stimulate Colorado Economy, Create Jobs

Len Nichols — Fri, 13 Nov 2009 14:05:00 -0500

Talking about health care reform all over the country, I have the opportunity to see many states' health systems up close. In particular, we spend a lot of time in Colorado -- as evidenced by our study on Grand Junction. In the context of current reform discussions, I began focusing on the state in earnest in 2006 when the Colorado Blue Ribbon Commission for Health Care Reform began trying to identify a sustainable future for the state's health care system. It was a privilege to be consulted by the Commission -- a true bipartisan and multi-stakeholder effort -- about choices they could make to cover more Coloradans, improve the quality of care while reducing health care cost growth, and make the health system economically viable in the long run. At the end of a long and impressive (but surely exhausting) process, the Commission's recommendations look prescient, in that they are structurally and conceptually consistent with the federal health reform proposals under consideration today.

At the time, the Lewin Group evaluated the Commission's recommendations to quantify the number of people who would be covered, how much it would cost, and the potential savings to households.

This week we released a study that picks up where the Lewin Group analysis stopped. We wanted to evaluate whether, using Colorado-specific data about income, jobs and premium growth, health reform could actually help the Colorado economy. To an audience of local business leaders invited by the Denver Metro Chamber of Commerce, I explained that failing to fix the health system will only lead to higher costs and a more unsustainable system, and make the coverage crisis worse. Reform done right, i.e., along the lines of the Commission's recommendations, in contrast, will on balance create jobs and stimulate spending that will benefit the Colorado economy as a whole.

It is no secret that health care costs place increasing strain on households, employers and governments. So the first thing we did in our report was demonstrate, with original and secondary state-specific data, that the economic consequences of maintaining Colorado's current health system are not good. Without reform in Colorado:

Health care and premium costs will grow at more than twice the rate of economy-wide productivity.
More Coloradoans will be uninsured, fewer will be covered by employer-sponsored insurance, and more will rely on Medicaid coverage.
Employer health care contributions will continue to rise.

Still, at a time when Colorado faces a two-year budget deficit of more than $2 billion, our task was to answer one fundamental question: will the economic benefits of coverage expansion and improvements to the delivery system outweigh the cost of financing health reform? We found that while significant state investment is required to finance reform, the resulting economic benefits will exceed the costs.

Specifically, our study found that expanding health insurance coverage in Colorado will (in 2019):

Lead to $3.8 billion in new economic output, with nearly 60 percent of new economic activity occurring outside of the health care sector.
Create 23,319 jobs, with 40 percent of job growth occurring outside of the health sector.

We also found that in addition to the benefits of coverage expansion, delivery system reforms alone could (in 2019):

Yield between $11 and $38 billion in additional savings.
Lower premiums by 5.5 to 17 percent

Finally, delivery system reform could have significant benefits for employers. In particular, health care reform will (in 2019):

Reduce uncompensated care costs and increase Medicaid payment rates, thereby reducing costs that are shifted to the privately insured
Establish a more efficient, high-quality delivery system
Lower premiums compared to what they would otherwise be by between 9.7 and 24.8 percent

The good news is that Colorado has already made progress toward health care reform. In particular, Colorado is leading the way to a more sustainable health system through innovative multi-stakeholder partnerships, integrated systems of care like Denver Health, and innovative communities like Grand Junction. Health reform is certainly a shared responsibility -- households, governments, and employers have a role to play. Colorado is poised to lead the way, if its leaders are willing to invest in the most effective ways.

IN THE STATES: Comparative Effectiveness in Minnesota

Meredith Hughes — Thu, 12 Nov 2009 19:49:00 -0500

What is comparative effectiveness research? If you need a reminder: comparative effectiveness means comparing two or more treatments for the same health problem to see which one works best for patients. The question has popped up quite a bit since comparative effectiveness research showed up in the economic stimulus package alongside other common sense health reforms, such as health IT adoption. Comparative effectiveness is about giving doctors and patients more information and facts for decision-making, not about taking away their autonomy.

Here's a real world example that's worth noting. The Institute for Clinical Systems Improvement (ICSI) in Minnesota is an example of an independent (private), non-profit organization that works to assemble and disseminate comparative effectiveness research. Clinicians in ICSI review medical literature and make recommendations about the most cost effective treatments based on the best available evidence. HealthPartners Medical Group, the Mayo Clinic, and Park Nicollet Health Services jointly founded ICSI in 1993. ICSI is made up of 57 member organizations and is funded by seven Minnesota and Wisconsin health plans. (The research funded by the federal stimulus bill looks at effectiveness, and doesn't make recommendations based on cost.)

ICSI maintains a list of evidence-based health care guidelines to encourage member organization to adhere to the best clinical practices. When better evidence comes along, previous guidelines get retired to make way for higher standards of care. For example, the most recent ICSI report updated care guidelines in several categories:

Obesity Guidelines. Because obesity presents such significant health concerns for the U.S., the Prevention and Management of Obesity in Mature Adolescents and Adults Guideline workgroup revised this document in 2008 to provide a more multi-faceted approach. It updated information on body mass index (BMI) and co-morbid conditions to include approaches to weight loss for each BMI category. Content and clarifying language were added to the waist circumference annotation. Conclusion grading worksheets on physical activity and low carbohydrate diet were incorporated into the related annotations, and one on surgical approaches to weight loss was added to the guideline.

Preventing Chronic Disease Through Primary Care. The guideline defines strategies and programs providers, communities, payers and employers can offer to support patients to make essential changes in four behaviors that contribute to roughly 40 percent of all deaths in the U.S. -- poor nutrition, physical inactivity, smoking and hazardous alcohol consumption. As a result, its recommendations are being used to address conditions like prediabetes, and are seen as a preventive component of care in health care homes.

Surgical Protocol: Before, During, and After an Operation. ICSI significantly revamped this protocol to describe all the steps performed throughout the pre-, intra- and post-operative periods of surgery. The protocol outlines the processes involved in obtaining patient consent, and verifying and marking the surgical site. It addresses the prevention of site infection for numerous surgical procedures, starting with the preoperative evaluation and surgical planning and proceeding through the perioperative period.

Guidelines and protocols describing the best standards of care are the primary goal of ICSI, though they also provide support for member institutions through strategic initiatives such as DIAMOND (Depression Improvement Across Minnesota, Offering a New Direction). DIAMOND is a collaborative care model that emphasizes depression detection and treatment. The program has six components:

A checklist that helps the care team detect and monitor symptoms of depression (ICSI discovered that most primary care physicians only pick up about half the cases of major depression in their patients)
A way for the care team to monitor the depressed patient
A proven medical guide to know how best to change or intensify treatment
Tools to keep a patient who is getting better from falling back into major depression
A care manager to educate and help the patient reduce depression symptoms and improve functioning
A psychiatrist to review patient cases with the care manager and consult with the primary care physician on any recommended changes in treatment

ICSI member organizations Community-University Health Care Center, Family HealthServices Minnesota, HealthPartners, Mayo, and SuperiorHealth Center launched the DIAMOND program in just 10 primary care clinics in early 2008, and by September, the program had spread to approximately 30 clinics serving 1,000 patients. According to ICSI, after six months in the program 47 percent of depression patients were in remission, and an additional 12 percent showed significant improvement.

ICSI's experience in Minnesota shows us that comparative effectiveness research can be a great tool for health care quality improvement. By working together and committing themselves to the most up-to-date, evidence based treatment guidelines, ICSI member organizations are able to provide high-quality, patient-centered care.

IN THE STATES: Simplify, Simplify, Simplify in Wisconsin

Meredith Hughes — Wed, 21 Oct 2009 19:00:00 -0400

When it comes to health reform at a state level, the state that gets the most attention is usually Massachusetts. But other states, such as Vermont, Hawaii, and recently, Wisconsin, are starting to get recognition for their innovations. Different states have different priorities and strategies to accomplish the goals of reform. While Massachusetts, for example, focused on expanding coverage with an individual mandate to purchase health insurance, Wisconsin started simplifying and building on existing public health programs to expand coverage, says a new report.

Produced by the Robert Wood Johnson Foundation and the State Health Access Data Assistance Center (SHADAC), "Wisconsin's BadgerCare Plus Coverage Expansion and Simplification: Early Data on Program Impact," outlines Wisconsin's strategies for reform and provides a preliminary estimate of the state's success.

Simplification was a big deal to Wisconsin reformers. Before Wisconsin's new program, BadgerCare Plus, the state had several different health programs with a bunch of fragmented eligibility requirements -- which was confusing for both members of the public seeking care and officials trying to administer the programs. The inefficient system was also expensive to maintain. BadgerCare Plus combined resources from already existing programs -- SCHIP (called BadgerCare in the state), Medicaid, and Healthy Start. BadgerCare Plus extended eligibility guidelines and simplified the enrollment process, in hope of getting more people to join the consolidated, simplified program.

As we've noted before, having a program in place doesn't mean it's going to be utilized. Often, some kind of outreach campaign is needed to inform people the program exists, explain who is eligible for it, and encourage people to make use of it. And once they're in the program, the deluge of paperwork can discourage continued enrollment. Wisconsin simplified this process by auto-enrolling about 40,000 eligible people in the old programs (like SCHIP) into BadgerCare Plus at the program's inception. Wisconsin also offers an online enrollment option called ACCESS, which explains eligibility requirements and allows people to register online. According to the report, almost 40 percent of BadgerCare Plus applications have come through this online portal.

Expanding coverage is a primary goal of health reformers in Wisconsin. They set their target at 98 percent of the population, but specifically wanted to target children, parents, and other caretaker adults. By consolidating multiple programs, reformers are better able to reach the goal of providing seamless coverage. BadgerCare Plus removed income eligibility limits for children under 19 years old, pregnant mothers, and youth exiting out-of-home care. Previously, pregnant mothers could get care through Medicaid and Healthy Start only if they were below 185 percent of the Federal Poverty Level. Children could get coverage through SCHIP if they were below 185 percent FPL -- now all children and pregnant mothers can get the coverage they need through BadgerCare Plus.

The BadgerCare Plus program is relatively new -- started in February of 2008 -- so researchers are still trying to determine the stability of enrollment in the program. (At what rate are people entering, exiting, or re-enrolling after a time lapse?) But preliminary findings show the program has been pretty successful. Though the new program offered coverage to all income levels, reformers were glad to see enrollment expanded significantly among low-income children and their adult caretakers. And the program is expanding still -- in June 2009, Wisconsin launched the BadgerCare Core Plan to provide coverage to low-income childless adults.

The report pulls out the key strategies that made Wisconsin's program successful, including administrative simplification, auto-enrollment, targeting kids and families as a whole to expand coverage, expanding income eligibility limits, and aggressive community outreach. Though its early, Wisconsin is a good strategic role model for efficient, effective coverage expansion.

IN THE STATES: There's More Than One Brady in New England

Allison Levy — Wed, 21 Oct 2009 16:06:00 -0400

In the world of state health reform, Vermont often plays the Jan to Massachusetts' Marcia. However, preliminary evaluations suggest that other states and policymakers would do well not to ignore New England's favorite middle child. My colleague previously wrote about Vermont's most recent legislative action on health reform passed in May of 2006. Now, a study published by the Robert Wood Johnson Foundation this week updates us on Vermont's achievements. Here are some of the successes from the Year 1 Interim Report:

Universal health care legislation met its goal of significantly increasing the number of insured Vermonters. Between 2005 and 2008, the percentage of insured Vermonters between the ages of 0 and 64 increased by 2.4 percent -- from 88.8 percent to 91.2 percent. Insurance coverage expanded faster in Vermont than in any other New England state during this period.
Vermont's health reform legislation created the Catamount Health Insurance Program, providing subsidized coverage to Vermont's uninsured with incomes below 300 percent of the federal poverty level. As of April 2009, Vermont was just shy of reaching the enrollment goal of 8,800 people.
Participation in public health plans increased significantly once health reform was enacted; many of the new enrollees were previously eligible for coverage but may not have known. The increase is attributed to successful outreach campaigns. There was a 5.5 percent enrollment increase in traditional Medicaid and a 21.0 percent enrollment increase in Vermont's Health Access Program for childless adults.

Vermont's early accomplishments provide a few lessons for other states to consider as their own health reform efforts come to fruition:

Stakeholder collaboration -- get all the key players (government, providers, insurers, business and consumers) on the same page.
Federal assistance may be necessary for sustainability -- Vermont will not be able to continue its current programs -- unless new sources of revenue are located -- without the continued support of the federal government.
Keep it simple -- lawmakers need to continue to address basic barriers and challenges to program enrollment.
Health system-level improvements are necessary -- lawmakers need to address underlying inefficiencies in order to make system-wide improvements in prevention, disease management, costs, and quality of care.

As Vermont demonstrates, health care reform is an ongoing process. It takes continued analysis and adjustments to make lasting improvements and changes to the health care system.

IN THE STATES: Sun, Sand and Employer Mandates in Hawaii

Meredith Hughes — Mon, 19 Oct 2009 19:55:00 -0400

Hawaii is a popular destination for anyone seeking sun, sand, surf, or even volcanoes. It's also a top spot for affordable health care coverage.

As The New York Times reported this weekend, Hawaii has the lowest Medicare costs per beneficiary and is tied with North Dakota for the nation's lowest health care premiums. People in Hawaii also tend to live longer than those elsewhere in the United States. As we've mentioned before, Hawaii ranks as one of the top states when looking at health indicators that represent health care access, quality, costs, prevention and treatment, equity and health outcomes.

There are many different theories as to what causes relative health and longevity in Hawaii's population. April Donahue, executive director of the Hawaii Medical Association, told American Medical News Hawaii's population typically has a healthy diet. The Times interviewed a number of doctors and hospitals, and found answers ranging from an active population to a significant military presence to dominance by just a few non-profit insurers in the market.

But the most obvious answer to Hawaii's healthy population may be Hawaii's health care coverage laws. Even with the recession, Hawaii has one of the highest levels of health coverage in the nation, second only to Massachusetts. Of adults under the age of 65, only 10.7 percent are uninsured in Hawaii -- about half of the national rate of 20.4 percent for that age bracket.

Starting in 1974, Hawaii mandated employers provide health care coverage to employees who work more than 20 hours a week. This policy is regarded as an important key to the overall health of the population and the low costs of care, reports the Times. For example, Kaiser Permanente Hawaii covers approximately one-fifth of the state, and of those, it screens 85 percent of 42 to 69 year old women for breast cancer. That's one of the highest screening rates in the U.S.. Hawaiians are the most likely to be diagnosed with breast cancer, but at the same time, the most likely to survive it, according to the Times.

Emergency room utilization is low -- approximately 34 percent lower than the national average. Widespread health care coverage makes it easier to reserve emergency rooms for emergencies, not things like routine prescription refills. Hawaiian hospitals and insurers argue having 90 percent of the population covered frees up resources to fuel innovation -- Hawaii's top three medical providers are in the midst of adopting electronic medical records.

Hawaii's distance from the rest of the mainland U.S. also has a hand in aiding reform efforts, argues the Times. Health providers have less hope of attracting customers from other states (so they didn't feel the need for huge facilities and lots of expensive equipment), and it's more difficult for employers to threaten a move across state lines when they don't like the state health care laws (the Pacific Ocean is a big place). Hawaiians are less likely to get MRIs and less likely to be admitted to the hospital -- but they're still healthier and live longer than people in other parts of the country.

Some policymakers feel Hawaii's system could be a model for health care reform in the rest of the United States. The Times says, "The Hawaii experience suggests that overhauling health insurance before changing the way care is provided could work, eventually." Current Hawaiian law requires health plans have, at minimum, low co-pays, no deductibles, and limited out-of-pocket costs -- a package that is more generous than some of the national health reform legislation currently under consideration, Some Hawaiian employers are concerned national reform will allow competitors to undermine them with cheaper, but lower quality health plans.

Others feel the coverage laws in Hawaii put too much strain on employers. With the economy still struggling, many employers in Hawaii are hiring part-time workers to avoid paying for health benefits, like pizza shop owner Barbara Zacchini -- she has 17 employees who all work under 20 hours per week, reports the Times . Additionally, though Hawaii's distance from the rest of the U.S. may have stemmed excessive cost growth, small hospitals on the state's outer islands are losing money.

Hawaii's system may not be perfect, but it looks pretty good from here. The state has taken big steps forward in health care cost, coverage, and improving the overall health of the population, And those are the main goals of health reform.

IN THE STATES: Big Variations In Quality and Access

Meredith Hughes — Fri, 09 Oct 2009 13:07:00 -0400

Earlier this week, we looked at insurance coverage on a state by state (or more precisely -- district by district) level. Based on a similar concept, the Commonwealth Fund report, Aiming Higher: Results from a State Scorecard on Health System Performance, 2009, looks at how well -- or poorly -- states are performing on health care. The report looks at a number of indicators that represent health care access, quality, costs, and health outcomes; this includes avoidable hospitalizations, healthy lifestyles (like not smoking), and preventative care, such as routine checkups and screenings.

The report is a follow up on an earlier study from 2007, which mapped the same factors, and looks at each state and the District of Columbia. Some states got better over time, and some states got worse, though none of the states moved very far up or down on the scorecard. According to the report, many adults are losing their health care coverage and health care costs are on the rise, but there have been improvements in some areas -- particularly those targeted by public incentive programs (such as Medicare provisions requiring hospitals to report on quality measures, like patient mobility, in return for payment updates).

Karen Davis, president of the Commonwealth Fund, told USA Today the report found "shocking variations" in health status and health care across the nation. In DC and Louisiana, for example, about 29 per 100,000 women die from breast cancer annually, higher than the national average of 24.1, and far higher than states such as Alaska (17.7 deaths per 100,000 women) or Hawaii (19.0 per 100,000). Currently, Hawaii has the best health status on all indicators. In 2009, Hawaii climbed up from its 2nd place spot in 2007 and supplanted another high performer, Vermont, for first place. Massachusetts is the highest performer on access to care (thanks to universal coverage reforms initiated in 2006), but lags behind more than half of all states in avoidable hospital use and costs. California ranked in the top quarter of states in terms of "healthy lives" (longevity and personal health choices), but ranked near the bottom on access, prevention and treatment, and equity (protecting the health of vulnerable populations).

The Commonwealth Fund argued that the findings make the case for national health reform. "When we take action at a national level...we succeed," Karen Davis told USA Today. "States cannot go it alone. Health reform is needed on a national level."

See where your home state measures up on this scorecard or check out the interactive map:

IN THE STATES: Pay for Performance in Medicaid

Meredith Hughes — Thu, 01 Oct 2009 14:00:00 -0400

We've written often about misaligned incentives in the US health care system -- we pay for quantity of care instead of paying for quality. We've seen high-performing health systems across the nation work to reverse this trend -- and succeed in bringing down costs and improving quality. It is possible for the U.S. health care system to become a value-based purchaser, to move toward pay for performance (healthier patients getting the right treatment at the right time) rather than fee for service (paying for more and more tests and procedures, regardless of whether or not they help the patient). So we're glad to see states taking steps toward pay for performance by including it in their Medicaid contracts.

According to a 2007 study sponsored by the Commonwealth Fund, half of all states currently operate some kind of pay for performance initiative in Medicaid. Researchers conducted a survey of state Medicaid directors and found that 85 percent of the states planned to incorporate some form of pay for performance program within the next five years.

The most common type of pay for performance program in Medicaid is managed care or primary care case management (PCCM), according to the report. The goal of PCCM is to encourage patients to foster a relationship with a primary care provider, so that patients get more comprehensive, coordinated care. Patients can stay healthy (or healthier) with affordable preventive care visits and stay away from costly emergency rooms. According to the Children's Health Insurance Research Initiative, states are free to use regular fee-for-service or PCCM under Medicaid and SCHIP. About half of states use PCCM, and about 30 percent of kids in SCHIP are getting care through a primary care case management.

The Commonwealth Fund report offered examples of some problems and solutions encountered by state Medicaid officials:

Alabama is offering reimbursement increases tied to provider participation in a program using technology to improve monitoring of chronic diseases. HIT also has the potential to reduce data collection costs, which should facilitate P4P expansion into less traditional venues.

The Oregon Health Care Quality Corporation, involving state government, health plans, medical groups, insurers, purchasers, providers, and consumers, is working to incorporate standardized performance measures into their P4P activities.

Several Medicaid directors were concerned that P4P activities might impinge upon beneficiaries' access to care by causing providers to leave the Medicaid program or limit the number of Medicaid beneficiaries in their practices. This concern is shaping some of the approaches taken in pay-for-performance programs, particularly in states with large rural or sparsely populated areas. For example, South Carolina is offering increased reimbursement to providers who agree to establish a Medicaid medical home.

The vast majority of Medicaid directors reported that their priority in operating pay-for-performance programs is to improve quality of care rather than reduce costs. Some states are targeting specific aspects of care, such as the overuse of emergency department services. Maine's Physician Incentive Program ties 30 percent of a performance bonus to emergency department utilization.

A caveat from Commonwealth: Though quite a few states have implemented some kind of pay for performance program in Medicaid, the study found very few states actually conducted any followup studies to evaluate how well P4P was working.

IN THE STATES: North Star State Shines Bright for Health Reform

Allison Levy — Fri, 18 Sep 2009 19:08:00 -0400

We're always looking for real-life examples of low-cost, high-quality care. Minnesota is a good place to look, and the state's largest health plan is a good place to start. Patrick Geraghty, CEO of Blue Cross Blue Shield of Minnesota, took part in a NIHCM health policy forum in Washington this summer and presented the "Minnesota Experience." He suggested that the nation's leaders embrace the Minnesota model -- because it works.

"The discussion we are having as a nation is really not just about health care but it's about health. Wellness, prevention, and quality outcomes is really what we are collectively thinking about," Geraghty said. Positioning itself as a "health" -- as opposed to a "health care" -- company, Geraghty described BCBS's effective, "disruptive innovation" model for delivering care. Steps he called for include:

Insurers should pay according to the quality of care delivered -- not by the volume of services performed. Paying for volume, he explains, produces volume. A system of global payments, bundled services, and pay-for-performance generates cost-effective care.
The health care industry needs to be transparent. Consumers should have access to a care comparison tool, so they can evaluate providers, treatment patterns, and cost across the system. (Consumer-driven health care was born in Minnesota!)
The medical community must establish evidence-based care guidelines. The entire health care community must be more collaborative and less competitive. Information and data are "critical community assets." By sharing best practices, the health care community gains as a whole.
Insurers need to incent and reward healthy behavior. For example, BCBS of Minnesota offers benefit plans where consumers get a premium reduction by successfully managing their numbers. As individuals work to improve their cholesterol, BMI etc., they are also working to lower their premiums. Results are encouraging.
Insurers should tie benefit strategy to appropriate care models. For example, BCBS waives co-payments for the use of retail clinics. Minnesota is pioneering the retail clinic industry -- retail clinics provide low cost, high quality care.
Insurers should take a comprehensive approach to prevention. For example, BCBS of Minnesota performs health risk assessments to tailor benefits to the individual. They offer smoking cessation programs, online coaching, phone coaching and various preventive care incentives. BCBS also works with employers to help them provide a healthy work environment, for example, consulting on vending machine/cafeterias food options and wellness programs.
The health care system needs to be integrative. Hospitals in Minnesota, for example, own all their physicians, clinics, ancillary services, transportation services, home health care services, and rehabilitation services. In an integrated system, the hospital provides coordinated (and high quality) care to patients. Electronic health records, furthermore, facilitate a smooth, integrated system.
Geraghty not only suggests engaging the individual and employer -- but advises involving the community as well. Geraghty understands the social determinants of health -- and ensures that BCBS encourages health and wellness throughout the community. He argues that we need to "dig in" and tackle basic cost drivers such as obesity and tobacco. BCBS is a huge advocate for smoking cessation programs, sidewalks, bike paths etc. Their efforts have been successful -- Minnesota has a 17 percent smoking rate, the US has a smoking rate of 22 percent -- and BCBS of Minnesota has a 10.9 percent smoking rate.

As the nation debates the details of health care reform, Geraghty argued that we cannot fix the system with a "single bullet" but that progress is possible with a holistic, innovative, comprehensive strategy to change the system. He left us with this: "Minnesota has been a leader, is a leader, and looks to be a leader in the quality of care being delivered in this country. This is too big an issue to be a partisan political issue." We agree.

IN THE STATES: Indiana Leads the Way on Prevention

Allison Levy — Fri, 11 Sep 2009 16:29:00 -0400

We all know you can earn rewards for frequent flying. But what about for routine trips to your doctor?

Emphasizing primary care and preventive services is a key goal of health reform and many contend the savings from such programs can help finance a health care overhaul (and make us a healthier country). Yet, the details of how these savings might be realized are less clear.

Indiana is one state to find some answers. Contributing to a statewide effort to improve population health, Managed Health Services, one of three Medicaid plan administrators in Indiana, now offers the CentAccount Healthy Rewards Program. Participants accrue dollars on a CentAccount Mastercard debit card as a bonus for participating in appropriate preventive care services -- in the appropriate care settings. LIke the doctor's office, not the E.R.

For example, a patient will earn $15 for seeing a primary care physician within the first three months of joining, and can get additional money if they get certain screenings, for instance for cervical cancer or chlamydia. (which can cause complications in pregnant women and their newborns.) They earn $10 each time they take their newborn baby to the doctor's office for a recommended checkup.. The money on the card can then be used to pay for health-related items at participating grocery and convenience store, including over-the-counter medicines, diapers, and bottles.

Pat Rooney, president and CEO of Managed Health Services, recently told the AP, "What we're trying to do is promote the healthy behavior and make sure the people are getting the right things that they need." Rooney contends that "Just getting people in to see their primary care doctor is always a challenge with this population."

Realigning incentives is a central goal of reform. As we've written before, small changes can have a big impact on personal behavior, health, and system savings. Often, the return on investment from primary care and prevention depends on how you define these programs. The results from Indiana's initiative expand our definition and refine our discussion of such efforts.

IN THE STATES: Massachusetts Health Reforms Are Bold, But Will They Succeed?

Tom Emswiler — Mon, 10 Aug 2009 13:36:00 -0400

With Congress on its summer break, it seems like a good time to take a look at what's going on in Massachusetts. The state is covering 97 percent of its people. Costs remain a challenge -- but Massachusetts is moving diligently and creatively toward solutions.

The New York Times noted in an editorial this Sunday:

Massachusetts' experiment in universal health coverage has become a favorite whipping boy for opponents of health care reform. They claim the program is a fiscal disaster and that the whole country will be plunged into similar disaster if President Obama and Congress' s Democratic leaders have their way.

That is an egregious misreading of what is happening in Massachusetts. The state's experience so far suggests that it is more than possible to insure almost all citizens, and stay within planned budgets -- although it will take great creativity and political will to hold down risings costs so that the program is sustainable.

The people of Massachusetts would probably welcome some good news right now. In addition to a major baseball controversy, a fund for helping unemployed residents purchase insurance running dry, and a partial cut to health funding for legal immigrants, Bay State residents were reminded the other day by NPR that their health costs were the highest in the country.

At least it's nice and mild on the Cape.

The state made huge headlines three years ago when it became the first in the country to require individuals to purchase health insurance (recent update here). It made more headlines last month when an expert panel recommended a movement away from fee-for-service and towards global payment. This is without question the biggest news in health reform outside of Washington in 2009. Let's give it a closer look.

It's helpful to remember that the panel's major recommendation is not the only delivery system reform news coming out of Massachusetts. As I wrote recently, their Senior Care Options program is an innovative strategy for providing coordinated care to beneficiaries dually eligible for Medicare and Medicaid. The state is also using grant money to convert 14 community health centers into patient-centered medical homes. The sites will use a team approach: a primary-care physician working with a nurse or health educator to ensure patients understand their treatment, are more closely monitored, and have more contact with their clinicians than just "15 minutes every three months."

The payment commission originated in a bill passed last summer, aimed at protecting Massachusetts' historic achievement of insuring 97percent of its citizens. As supporters at the time noted, soaring costs could threaten to undo this milestone -- just as soaring costs are threatening the coverage of all middle class Americans, making comprehensive reform at the national level a necessity this year. A commission was needed in their state to determine what steps could be taken to bend the cost growth curve.

As stated above, Massachusetts has the highest health costs in the nation. What's even more troubling is what the picture looks like if nothing is done. The chart below shows health spending in the state doubling (!) by 2020.

But Massachusetts isn't sitting back and doing nothing.

Here's a quick refresher for why global payments are being considered as a possible solution. In a system of global payment, insurers pay a set rate on a per member per month basis to an integrated delivery system or Accountable Care Organization for all services needed by that individual. Providers will make money by keeping their patients healthy, thereby reducing the health services they require, instead of making money off of providing services. A variety of risk adjustments will be introduced to ensure fairness. Our ability to measure, monitor, and reward quality is much better than during the HMO heyday of the 1990s.

The report issued in July states that the transition should take place within five years. This will allow time for hospitals, physicians, and other providers to form Accountable Care Organizations -- either real (incorporated) or virtual (networked). And while an oversight body will determine the global payment methodology, it is anticipated that the market will set the payment amounts.

No one thinks this will be easy, but the physicians seem tentatively on board. Twenty percent of Massachusetts physicians are already paid via global budget, so great responsibility falls to them to work with their colleagues to champion the new system. This can be thought of as a "nice guy" cost control initiative; global payment with market rates will require all providers to work together to provide care efficiently and effectively. If, on the other hand, costs continue to grow beyond our ability to pay, cost containment 20 years from now could be ugly and involve price controls. Avoiding that through smart and comprehensive health reform now would be good for the country.

As for the next steps, the proposal must be approved by the legislature and the governor. Although not a foregone conclusion, the commission that voted unanimously for the recommendations were appointed by the legislature and the governor, and there is a clear consensus that the current spending trajectories are unsustainable.

So can we consider the news of the proposed movement to global payment ‘good'? We've clearly got to do something about health care costs that grow faster than the economy as a whole every year. Global payments are a potentially innovative approach, and Massachusetts' willingness to explore this option will provide a natural experiment from which future reforms can learn.