Healthcare reform -- with a dose of profit
THE RICH get richer. Can that economic reality coexist with true healthcare reform?
The rich -- in this case Partners HealthCare, the parent of Massachusetts General Hospital and Brigham and Women's -- insist it can.
Last week, the Boston Globe's Frank Phillips reported that Partners and Blue Cross-Blue Shield paid almost $500,000 in lobbyist fees to help shape healthcare legislation the media routinely describe as ''reform." Does the reform these powerful entities paid for amount to true system reform -- or is just about them?
''Real healthcare reform isn't just more money for the hospitals," acknowledges Partners' chairman Jack Connors Jr. ''Real healthcare reform is a combination of increased health insurance coverage to allow us to have the broadest coverage in the country and more appropriate reimbursement for the hospitals." That is what Connors pledges is the thrust of a long awaited healthcare bill.
Some, like John McDonough, who heads HealthCare for All, an advocacy group devoted to improving access, are putting aside previous doubts. In a recent blog, McDonough wrote: ''Everything our informed sources tell us (short of showing us the bill) leads us to believe we're on the verge of a hugely important and extensive expansion in affordable coverage for most of the state's uninsured."
Others are cautious: ''Webster's dictionary defines reform as 'to make better by removing faults and defects.' " points out Ellen Bender, a longtime healthcare analyst. ''Did a year and half worth of effort truly produce reform in our system? We'll wait to see."
Here is a breakdown of some issues and concerns for each component of the legislation:
Increased access to affordable health insurance: The anticipated bill does not call for universal healthcare coverage. So, how many more Massachusetts citizens will gain access to health insurance coverage as a result of this legislation? Are the deductibles reasonable? Will reasonable health services be provided? Is the government subsidy big enough to allow those at the lower end of the income scale to buy insurance? Is outreach aggressive enough to enroll everyone eligible for Medicaid? Is business doing its fair share to pay for increased access? The legislation is expected to call for a business assessment -- about $300 per employee for businesses that do not provide health insurance.
Cost management: The system cannot sustain double-digit increases in healthcare costs. How does this legislation address cost management? Does it require transparency? Will hospitals and doctors be mandated to provide information on efficiency and quality? Will Medicaid reimbursement be tied to cost, efficiency, and quality standards?
Increased Medicaid reimbursement to providers. How much more goes to hospitals in the Partners network? How much goes to non-Partners hospitals? How much goes to community hospitals? Will increased Medicaid reimbursement to providers make the overall system more accessible, affordable, and stable?
''Hospitals say that Medicaid is a lousy payer, and that employers and health plans need to make up the difference. I would hope that all this new Medicaid money would mean more affordable hospital costs for the state's employers and everyone's private health plan members," says Charles D. Baker, president and chief executive of Harvard Pilgrim Healthcare.
The bill is expected to add $270 million in new Medicaid reimbursement money over the next three years. The Partners hospitals are expected to get approximately 15 percent of that money, bringing more revenue to a healthcare venture that is already enormously successful.
As the Globe reported in January, Partners saw a 39 percent increase in profit to $324 million for fiscal year 2005. The gain gave Partners a profit margin of 6.1 percent compared to 4.7 percent last year.
Partners argues that its profit margin is irrelevant to the issue of reimbursement it deserves for treating Medicaid patients. Last year, the number treated totaled 68,841. Yes, a wealthy healthcare provider will get more federal money, but so will other hospitals, including those hospitals that are struggling financially.
Besides, Partners argues, if in the end, a greater percentage of citizens is covered in this state than any other, who can argue with the reform label?
Massachusetts is one of the few states in the country having this healthcare discussion. If this legislation puts Massachusetts ahead of the country in terms of access to health insurance, it will be considered reform -- even if the reform is incremental and the rich get richer. That's economic and political reality.
Joan Vennochi's e-mail address is vennochi@globe.com. 