"Let's Recheck our First Assumptions" by Celia Wcislo

We all make assumptions, and the soundest assumptions help us move forward when forging a brand new path. They are temporary beacons and light the way for a very short distance. So, here are a few lessons learned by the Connector board

based on our initial assumptions that will help us see our way to next steps:

We assumed that there were only 380,000 uninsured in Massachusetts.
Seems that there may be many more than that low estimate. Maybe the Urban Institute was closer with their estimate of 500,000.
We assumed a modest expansion of Medicaid.
One year later, Medicaid is covering an additional 45,000 residents.
We assumed that only 60,000 would be eligible for Plan Type 1 (those making under 100% FPL and with a premium that the state pays completely).
And that we would consider signing up 54,000 as a great success. We have already signed up over 63,000 in Plan Type 1 and are greatly outpacing this assumption.
We assumed that 59% of the uninsured were 34 or younger. We assumed an individual mandate would get these people to buy insurance.
The only group that matches our projections is in Plan Type 1, where we automatically signed up everyone.
This means we need an adjusted projection: What will be the cost of treating an older population?
We assumed there was the provider capacity to treat all of these people.
About 150,000 people are now newly covered. They came into the system in only 8 months, so it is no surprise that it takes a long time to get a primary care doctor. How do we support our healthcare system so that meet the needs of everyone?
The costs providers are charging are going up for many reasons. The state decided to pay them more with Medicaid rate increases. There is hot competition for primary care doctors and neighborhood health centers. “Unit prices” are going up quickly.
The issue of provider rate increases has never been more critical. We need our Cost and Quality Council to get to work on this issue immediately.
We assumed that by using “competition” we could force insurance rates down permanently.
By promising the lion’s share of patients to the Medicaid Managed Care Organizations with the lowest rates, the Connector hoped to keep their premium cost down. This resulted in premium costs for MMCO plans that are lower than the BCBS bid for minimum creditable coverage – an insurance product that has higher deductibles, co-insurance, and larger out-of-pocket costs (one whose premium cost should be lower because individuals will pay more out of pocket). This makes no sense. Either BCBS is being paid too much for their Bronze plans, or the two largest MMCOs are paying too little for their coverage of the poor! The problem of costs is complicated, and we will have to better understand the real cost drivers as we go forward.

As we look to the future, we need to re-examine the process behind these assumptions, to understand if we have a “cost” problem, or an assumption problem. If we only tackle costs, but not our underlying assumptions, then we are guaranteed to repeat our mistakes.

Celia Wcislo is a member of the Connector board
and Assistant Division Director, 1199 SEIU