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Grossman on Partners-South Shore: Let’s Make a Deal

Posted by John McDonough February 28, 2014 05:06 PM

Today, I heard from State Treasurer and Democratic Gubernatorial Candidate Steve Grossman's campaign. Grossman has released an op-ed that "calls for solutions before lawsuits on Partners Healthcare merger with South Shore Hospital." The op-ed was published by the Boston Business Journal and you can see it here.

grossman.jpgBecause Grossman's campaign reached out to me directly, I have a hunch some of my recent posts on this matter, here and here, might have had some impact in triggering their writing effort. I had urged the full cohort of otherwise silent gubernatorial candidates to state their position (exempting Attorney General Martha Coakley who will have to respond in due course because of her official role).

Rather than picking a side between the Massachusetts Health Policy Commission or Partners/South Shore, Grossman writes that he would:

"(C)onvene an urgent meeting of all parties, including the Health Policy Commission (HPC), the Attorney General, Partners, and South Shore Hospital. My principal goal would be to find common ground and compromise on a deal that delivers quality care without increasing health care spending, reducing competition, and driving up premiums for employers and consumers. ... Destroying this deal is against the best interests of Partners and the people of the South Shore. ... Let's push Partners to revise its plan and lower reimbursements rates."

I applaud the Treasurer for being the first to step up and speak out. He did an artful job of not taking a position and keeping both sides guessing. He's put the first stake in the ground on this among the candidates. Let's see what the others have to say, if anything, and I'll report the results here.

Charlie Baker Speaks on Health Care (I)

Posted by John McDonough February 26, 2014 08:15 PM

Last Monday, Massachusetts Republican gubernatorial candidate Charlie Baker spoke at a forum at the Boston College Graduate School of Social Work about health policy matters in Massachusetts. This is good! Yeah for Charlie!

Two issues stuck out and I'll address them in sequential posts: first, Partners Healthcare's charlie baker.jpgproposed acquisition of South Shore Hospital; and second, Massachusetts waiving out of the Affordable Care Act. First, let's consider the Partners matter which I discussed in this recent post.

As reported by State House News Service and reprinted in Commonwealth Magazine, Charlie refused to disclose if he has a position on the Massachusetts Health Policy Commission's (HPC) recommendation that the acquisition be stopped from happening. "Asked specifically about Partners and South Shore Hospital, Baker repeatedly talked about the need for transparency." This has been Charlie's reflexive posture for years now: whenever asked a question he doesn't want to answer, up comes "transparency." Good for thee and not for me, or something like that.

"'I've been saying for about 10 years now that I think there's nowhere near enough transparency in the health care business. I do believe price and performance matters and it should be publicly available information and I think in a world in which there was complete transparency around what people were getting paid and how they were performing some of the issues around consolidation would become less important,' Baker said."


The dance of legislation

Posted by John McDonough February 23, 2014 07:25 PM

Have you ever had a book you've been telling yourself to read for years, and just never get around to reading it? When you finally do, you kick yourself: what took me so long!

I just did. It's called "The Dance of Legislation" first published in 1973 by Eric Redman, a astaire.jpgwet-behind-the-ears 20-something kid who got a job in the U.S. Senate working for US Senator Warren Magnuson (D-WA) and played a pivotal role in the passage of a law in 1971 that created the National Health Service Corps (NHSC) .

It's a super book.

First, it's an insider's look at the legislative process on Capitol Hill in the first term of the presidency of Richard M. Nixon. Repeatedly, throughout the legislative process, the NHSC bill was inches away from death for reasons serious and spurious. While life in the U.S. Senate has changed in innumerable ways over the past 41 years, essential dynamics remain in play: the power of ideas, the rewards of persistence, the unpredictable twists and turns, good and bad, that spell the difference between a bill's life and death. If you like policy and politics, this is an unstoppable page-turner that often provokes laugh-out-loud moments. And if you think that the legislative maneuver called the "pocket veto" is as dull as it gets, you won't say that after reading a nail-biting conclusion.


Moment of truth for Massachusetts health care cost control

Posted by John McDonough February 19, 2014 10:45 PM

Today the state's new Health Policy Commission (HPC) voted 9-0 to approve a report recommending that Partners Healthcare's proposed acquisition of South Shore Hospital not proceed. Though the HPC does not have authority to stop the acquisition, MA Attorney General Martha Coakley and officials from the Federal Trade Commission have been waiting for this report before making their own moves. If they follow through on the HPC recommendation, it will be the most dramatic and significant intervention in the Massachusetts health care marketplace by government since the state deregulated hospital finance controls back in 1991, 23 years ago.

Love it or hate it, this is big stuff, make no mistake.

Honestly, I recommend that you read the whole 123-page report, which includes Partners' dissent, as well as today's HPC response. I started by reading Partners' dissent and confess to being impressed by their arguments. Didn't last. The HPC analysis is impressive and solid, and their retort to the Partners' objections -- along with statements from three independent consultants -- is pretty devastating.


Governor Patrick Turns on the Lights

Posted by John McDonough February 9, 2014 10:42 AM

Three things, seems to me, were important for Governor Deval Patrick to address at his public event on Thursday concerning the enormous problems with Massachusetts' rollout of the health coverage under the Affordable Care Act:

1. Recognition of the real distress the rollout failure has created;

2. Change in operations to turn this disaster around as rapidly and well as possible;

3. Commitment to transparency, on a regular basis, moving forward.patrick iselin.jpg

By my scorekeeping, the Governor did well on all three counts. Though getting to where we need to be still won't be quick and easy, the Governor deserves recognition for making significant changes to get things on track. I'm not convinced, and I'm hopeful.

On the first point, here are the Governor's words:

"To the people whose transition has not been smooth, I join my colleagues from the Connector and MassHealth in apologizing to you for the inconvenience, and I want to thank you for your patience," Patrick said. "I also want to assure you that we are not going to let anyone slip through the cracks."

Good words, Governor, and thank you. Let's not forget, for a LOT of Massachusetts residents who are experiencing distress in getting needed medical scare because of this mess, it's been far more than an "inconvenience." Here's what one knowledgeable person on the ground told me on Friday:

"There is currently no solid process to get urgent medical need cases processed in a timely fashion. Uninsured consumers that have applied and are waiting an eligibility determination have two options to get needed health care right now: 1) Delay your appointment or 2) Pay out of pocket. To give you an example, a man with cancer had a kidney and part of his liver removed in December at a major hospital in Boston. He had a post-op appointment scheduled in early January and was told by his surgeon's office that he couldn't come for the appointment until he 'got his MassHealth figured out.' The 'solution' he was given was to delay his appointment or pay out-of-pocket. We're hearing stories like this regularly at the advocate and provider tables.

"We have been given 'contacts' at the state to help us 'resolve' issues and get people coverage, but the system is so, so broken, to the point where these contacts take many days to find applications and then many days to process them. Also, we are seeing erroneous eligibility determinations come out of the new clunky systems they've built."

Immediate attention to the immediate needs of people at risk has to be a top priority.  And please don't go shooting the messengers.


CBO Report (II) – Seeing into our health care future

Posted by John McDonough February 6, 2014 10:43 PM

Aside from the controversy described in the prior post, the new CBO Budget and Economic Outlook Report 2014-2024 contains many insights into the future of the US health care system, especially involving Medicare, Medicaid, and the Affordable Care Act. Let's explore.

Medicare: In 2013, Medicare had about 51 million beneficiaries; CBO expects that number to climb to 71 million by 2024 because of the Baby Boomer influx.

"The slowdown in [Medicare] cost growth during the past several years has been sufficiently broad and persistent to lead CBO to project that growth will be slower than usual for some years to come." CBO now anticipates Medicare services lower than it did last May, with reduced outlays 2014-2023 by $154 billion (or about 2%).

Medicaid: Enrollment is expected to rise from 69 million people in 2013 to 73 million in 2014 and to 89 million in 2024. By 2018 about 80% of the Medicaid eligible population will be in states that have extended coverage, currently at about 40%.

Affordable Care Act: ACA premium and cost sharing subsidies are expected to cost $18 billion in 2014 and to rise to $166 billion in 2024. CBO estimates that 5 million will receive exchange subsidies in 2014 rising to 19 million in 2016.

Uninsured: CBO estimates that the insurance coverage provisions of the ACA will markedly increase the number of nonelderly people who have health insurance, by about 13 million in 2014, 20 million in 2015, and 25 million through 2024. Still about 31 million non-elderly US residents are likely to be uninsured in 2024, roughly one out of every nine residents. Without the ACA, the number would be at about 56 million.

Of the remaining 31 million uninsured, about 30% (9 million) are expected to be unauthorized immigrants; about 20% (6 million) will be eligible for Medicaid but will choose not to enroll; about 5% (1.5 million) will be ineligible for Medicaid because they live in a state that has chosen not to expand coverage; and about 45% (14 million) will not purchase insurance even though they have access through an employer, an exchange, or directly from an insurer. If undocumented immigrants are included, 89% of US residents will have insurance coverage by 2024; not counting brings the proportion to 92%.

Risk Adjustment/Reinsurance/Risk Corridors: All three ACA programs, which take effect in 2014, reduce the likelihood that particular health insurers will bear especially high costs to cover the expenses of a disproportionate share of less healthy enrollees. They encourage insurers to offer coverage under the new federal rules and curtail their incentives to avoid accepting high-risk enrollees.Far from an insurance industry bailout, these programs will generate a net surplus of $8 billion for the federal government by 2024.

The big number to contemplate: by 2024, 180 million Americans will get their health insurance coverage through Medicare or Medicaid or exchange subsidies, or more than half the US population. A changed landscape for sure.

CBO Report (I) – CBO Says ACA Is Good for US Economy, Really

Posted by John McDonough February 6, 2014 08:08 PM

This week, the Congressional Budget Office (CBO) released its annual Budget and Economic Outlook for 2014-2024. If you have never viewed one of the reports, I recommend looking at this one.  It's fascinating on many levels.

I can't recall CBO's Outlook ever getting this much attention as this one, specifically because of CBO Budget Outlook-cropped-proto-custom_5-thumb-195xauto-6062.jpgnew estimates of the numbers of Americans who will stop working or reduce their hours of work between now and 2014 because they can now get health insurance coverage outside of their jobs thanks to the Affordable Care Act.

Two things: First, the oversized reaction to the estimate is one further example of the ACA insanity that continues to grip the nation's political class. Second, the CBO report contains a lot of compelling analysis about the nation's health system over the next 10 years that has been completely ignored.

Let's consider both of these, the second in a companion post following this one.

First, the insanity. Here is what the Report says:

"The ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period 2017 to 2024, almost entirely because workers will choose to supply less labor ... given the new taxes and other incentives they will face and the financial benefits some will receive. ... the ACA will cause a reduction of roughly 1 percent in aggregate labor compensation over the 2017-2024 period ... a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024. ... some people not being employed at all and other people working fewer hours ... almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses' demand for labor ... ACA will lead to a net reduction in the supply of labor" (pgs. 117-8)

"On balance, CBO estimates that the ACA will boost overall demand for goods and services over the next few years because the people who will benefit from the expansion of Medicaid and from access to the exchange subsidies are predominantly in lower-income households and thus are likely to spend a considerable fraction of their additional resources on goods and services ... The net increase in demand for goods and services will in turn boost demand for labor over the next few years, CBO estimates." (page 125)

That's it. People who were staying in their jobs for the sole reason to qualify for employer health insurance no longer need to do so as of January 1, 2014. Over the next 10 years, some of them will voluntarily leave their jobs or reduce their numbers of hours worked by their own free choice. No lost jobs, no layoffs. Social Security did the same thing; many seniors stopped working when Social Security began because their SS benefits allowed them to do so. That also reduced the number of hours worked. Heck, same thing with outlawing child labor; fewer hours worked because of that, for sure.

Right now, Republicans are deliberately misrepresenting the CBO finding to claim that people will be losing their jobs. Their claims are both untrue and dishonest.

About the author

John E. McDonough is a professor of practice at the Harvard School of Public Health. He is the author of the book “Inside National Health Reform”, published in 2011 by More »


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