Rick Lord: More Work To Be Done To Make Care Efficient, Affordable

One of a series of analyses on the 10th anniversary of the 2006 Massachusetts health care overhaul. Rick Lord is president and CEO of Associated Industries of Massachusetts.

In June 2006, I found myself sitting around a table with nine other people to hammer out the details of the first attempt by any state in America to reform its health care system.

Rick Lord (Courtesy)
Rick Lord (Courtesy)

None of the 10 people at that initial meeting of the Commonwealth Health Insurance Connector Authority -- The Wall Street Journal called us a “motley panel” of academics, union leaders, nonprofit executives and business people -- knew what to expect as we began to wrestle with the tough questions that had stymied all previous efforts at national health care reform.

How much in premiums can low-income people afford? What about middle-class families? Should plans be required to include prescription drug coverage?

The Connector board succeeded against all odds in getting health reform off the ground because the group of 10 made a commitment to stay at the table, resolve their differences, and build the system that everyone envisioned during that now-famous signing ceremony in Faneuil Hall. Board members compromised because we had to, because we felt a responsibility to find common ground on an issue that affected everyone.

The 2006 reform law accomplished its primary objective: The percentage of uninsured residents in Massachusetts dropped from 9.6 percent in 2006 to 4.4 percent, the lowest rate of any state.

I am proud to also note that Massachusetts employers continue to offer coverage at a higher rate than the national average. The Center for Health Information and Analysis reported in its 2014 survey that the percentage of employers providing insurance has remained steady at 76 percent, notably higher than the national average of 55 percent.

But the business community knew that that 2006 reform was designed to expand the scope of insurance coverage rather than address the double-digit annual premium increases that were crushing many employers. But the implicit understanding was that state policymakers would return to the table to address surging costs once the ranks of the uninsured were substantially reduced and brought into the system.

The Legislature followed through on its commitment to address health costs in 2012 through the passage of a comprehensive bill that created both the state’s Health Policy Commission (HPC) and a cost-growth benchmark, tied to the rate of overall growth of the state’s economy, by which we could measure progress in slowing the rate of health care spending. The commonwealth beat the 3.6 percent benchmark with a relatively modest 2.4 percent jump in 2013, but medical spending then surged by 4.8 percent in 2014.

That trend is continuing. Premium increases for small employers averaged 6.3 percent in January of this year with many of them experiencing double digit growth.

Tackling the health care cost challenge is a much more complicated and politically sensitive task than the solving the access issue. I remain hopeful, however, that we will begin to see progress.

At the HPC, on whose board I serve, we have begun to lay the groundwork for change with comprehensive research that shows some significant cost drivers: using teaching hospitals for routine care; going to the ER for non-emergencies; and high rates of patient readmissions. These result in wasteful, inefficient and inappropriate health care spending.

I feel confident that my colleagues on the HPC board, like my colleagues 10 years ago on the Connector board, will work together toward the shared goal of shaping a world class health care system that is not only accessible to all but efficient and affordable as well.

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