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"Affordability: The Underlying Issue of Costs" by Christina Severin

We have just marked the one-year anniversary of health reform and there is certainly a lot to celebrate. Over 63,000 low-and-moderate income individuals now have health insurance through Commonwealth Care. For many of these folks, including many that we’ve spoken with at Network Health, it’s the first time they’ve had health insurance in many, many years (we recently spoke with a 28-year-old woman who hadn’t seen a doctor in over 10 years), and they are tremendously excited about having meaningful coverage and about the opportunity to access needed care. Jon Kingsdale and the Connector Board continue to have the astuteness to recognize that health reform is an iterative process, and they are wise to not allow the perfect to be the enemy of the good as they work toward our collective long-term goals of a fully insured Commonwealth.

As Massachusetts gains momentum in reducing the number of uninsured, the issue will move from “how do we get everyone covered?” to “how can we afford to keep everyone covered?” As a managed care organization, Network Health has worked very hard to control utilization trends with innovative approaches to care management. For example, about a year and a half ago, we started using health coaches to work directly with our highest-utilizing members who disproportionately struggle to manage the complexity of living with a chronic disease like diabetes. These health coaches work with our members to improve each individual’s ability to self-manage his or her disease and gain personal control of his or her health. Through these efforts and other “non-gatekeeper” approaches to utilization management, Network Health has been successful in curbing the rate of growth of service utilization and hospitalizations. We have also done reasonably well managing pharmacy cost inflation and we have an impressive rate of generic drug use. Unfortunately, it’s not all good news. Consistent with general health care cost trends, our overall medical expense trend has grown steadily, driven especially by increasing unit costs. Given the complex and powerful market dynamics behind these rising unit costs – particularly hospital costs, making some headway on this issue is a difficult challenge.

This past Thursday, the Connector Board voted on the issue of “affordability”, and by now, we are all aware of the outcome (in case you missed it, check out Secretary Kirwan’s April 13th blog entry). To date, the issue of “affordability” that has garnered so much attention has been the issue of individual affordability, i.e., evaluating consumer price points and the mandate for individuals to purchase at these price points. However, what has not (yet) been discussed is the aggregate question of affordability, i.e., “how do “we” (yes, the collective “we”) feel about the amount of money spent on health care and what is our collective appetite to do what it will take to spend less?”. I’m well aware that this topic doesn’t win friends, as everyone seeks to put the blame on the other party, but I believe it’s an issue we must address head on if we are to be able to afford universal coverage as well as other social imperatives. It was on the strengths of many wide-ranging partnerships that passage of Chapter 58 was achieved and continues to be defined. It will take the same diversity of and commitment to ongoing partnerships to bring the issue of affordability to the forefront, and the same collective will to affect positive change. Massachusetts has been the first state to take on the issue of covering the uninsured. Could we also lead the way in taking on the challenge of making healthcare more affordable?Christina Severin is executive director of Network Health, a health plan serving more than 110,000 Commonwealth Care and MassHealth members in more than 300 cities and towns across the state.

This program aired on April 17, 2007. The audio for this program is not available.

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