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The Coming Chaos – Lessons from Massachusetts

By Stephen Tweed

This morning, I attended a program sponsored by our local Healthcare Enterprise Network here in Louisville.  The speaker was Thomas H. Lee, MD, the former President of Partners Healthcare System in Boston.  Dr. Lee was one of the people who had significant input into the creation of the health care law in Massachusetts that first required universal health care coverage.  Dr. Lee is now with Press Ganey. Some highlights from Dr. Lee’s presentation will be of interest to CEOs and leaders in home health, hospice, and private duty home care. Health Care Reform will unfold in three phases:

  1. Insurance reform – who gets covered and where the money comes from
  2. Payment reform – how the money gets paid to providers
  3. Delivery system reform – how the care is delivered

The Affordable Care Act was Phase 1.  Phases 2 and 3 are getting under way and causing great turmoil and stress.    As these phases unfold there will be “some things that are unpleasant for all parties and some things that are positive for all parties.” The most contentious issue is employer penalties and we can expect new legislation every two years to address the problems with the implementation of the law. The key elements of reforming the system are:

  1. Coverage for (almost) all
  2. Payment covering full costs of care (to reduce cost shifting)
  3. Meaningful efforts to control costs.

The challenge is that when the economy gets tight, Medicare and Medicaid want to pull back on paying the full cost of providing care, so providers shift the cost to commercial payers.  In Massachusetts, the payers rebelled against the cost shifting and that led to the crafting of the reform law. Dr. Lee also discussed the “overarching goal” of “Improving Value” and set out six elements of a strategy to improve value.  He defined value as… “The outcomes that matter to patients versus the costs required to deliver those outcomes.”

  1. Build real teams
  2. Measure outcomes and costs
  3. Provide episode-based incentives for value
  4. integrate care across delivery systems (the tough one)
  5. Grow excellent integrated practice units
  6. Enable information technology

These components are interdependent and not a menu where you can pick two. Some questions for you:

  • What are you doing in your home health agency or hospice to get ready for phase 2 and phase 3 of health care reform?
  • What have you done to address the implementation of the Accountable Care Act?
  • How is it affecting your agency?

 

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