A few weeks ago (how time flies!), we set out to explore the various elements and implications of the newest addition to the state laws governing the delivery of healthcare in Massachusetts: “An Act improving the quality of health care and reducing costs through increased transparency, efficiency and innovation”, and officially identified by the rather more prosaic name of “Chapter 224 of the Acts of 2012”.
We had gone to some lengths to condense the most notable of these 349 pages of new rules and regulations into a PDF document just 39 pages long. Combined with the Massachusetts healthcare laws originally passed under Governor Mitt Romney, and then substantially modified by the Democratic Party-controlled state legislature and Romney’s Democratic successor Gov. Deval Patrick, these laws essentially allow the state government to dictate just about anything and everything about the way healthcare is provided in that fair Commonwealth. Because of this, we have dubbed them “The Mass Mandates”.
Now one might think that the prolonged interval since our last post would have been more enough time for our distinguished readers to review the entire content of Chapter 224, or at least our 39-page condensate. However we’re willing to bet that few, if any, of you did so. After all, most of you have real lives. So in this post we’ll look at some of the specific provision and their implications. Doing so is important because under the second Obama Administration, the “ObamaCare” Affordable Care Act is quite likely to continue to ape the approach taken in Massachusetts. Why? Because the Democratic Party-controlled Massachusetts legislature, Governor Patrick and the Obama Administration share a common perspective with respect to what ails the U.S. healthcare system and how to fix it. (For the definitive work describing this perspective and its implications, we highly recommend the new book by Dr. Richard Fogoros, Open Wide and Say Moo! More on that in an upcoming post…)
So let’s go ahead and see what Massachusetts is mandating now.
The first thing that one notices about the new Mass Mandates is its naked honesty: the government of the Bay State is well on the way to taking complete control of its healthcare system. No more pussyfooting around. No more qualms about “creeping socialism” (or even “leaping socialism” for that matter). No more apologies or half-measures. Private enterprise may technically own the resources used to deliver healthcare services, but government entities will increasingly dictate whether, when, where and how they are to be deployed.
The quite visible hand of Massachusetts state government has been authorized to stick its fingers into just about every aspect of medicine, apparently regardless of who is asking – and paying for – the goods and services rendered. The ways in which it goes about doing this amount to a veritable laundry list of new rules, regulations and regulatory bodies. That’s one reason the text of the bill that was passed into runs to 349 pages.
Let’s go through a number of them individually.
The Health Planning Council
This very-high-level group is located within the state executive office of health and human services. It consists of:
The state secretary of health and human services (or designee) who is the chairperson
The commissioner of public health (or designee)
The director of the office of Medicaid (or designee)
The commissioner of mental health (or designee)
The secretary of elder affairs (or designee)
The executive director of the center for health information and analysis (or designee)
The executive director of the health policy commission (or designee), and
3 members appointed by the governor: a health economist, a health policy planner, and a health care market planner/service line analyst
The very first thing the Health Planning Council will do is to form an advisory committee that is supposed to “reflect a broad distribution of diverse perspectives on the health care system.” The second is to create a comprehensive “state health plan” that is intended to keep track of, well, everything:
The state health plan developed by the council shall include the location, distribution and nature of all health care resources in the commonwealth and shall establish and maintain on a current basis an inventory of all such resources together with all other reasonably pertinent information concerning such resources. For purposes of this section, a health care resource shall include any resource, whether personal or institutional in nature and whether owned or operated by any person, the commonwealth or political subdivision thereof, the principal purpose of which is to provide, or facilitate the provision of, services for the prevention, detection, diagnosis or treatment of those physical and mental conditions experienced by humans which usually are the result of, or result in, disease, injury, deformity or pain…
(d) The department may require health care resources to provide information for the purposes of this section and may prescribe by regulation uniform reporting requirements. In prescribing such regulations the department shall strive to make any reports required under this section of mutual benefit to those providing, as well as, those using such information and shall avoid placing any burdens on such providers which are not reasonably necessary to accomplish this section. Agencies of the commonwealth which collect cost or other data concerning health care resources shall cooperate with the department in coordinating such data with information collected under this section.
That’s right. From the lowliest medical assistant to the most sophisticated gamma knife, the Health Planning Council wants to know about anything and everything that has anything to do with the provision of healthcare within the state. Think about that for a minute; about how massive and intrusive and expensive and permanent just this one first provision of the Mass Mandates law happens to be. Every single hospital, clinic, nursing home, imaging center, (and maybe even 24 hour fitness center depending upon how the Health Planning Council wants to define its regulations) will need to report whatever the Council decides it needs to report. How detailed do these reports have to be? It’s completely up to the discretion of the Council. How many square feet is your facility? What pieces of equipment does it have, including make, model and year of manufacture? How many people do you employ, and what are their names and job titles? What is their training? Are they certified, and if so in what and by whom? How many computers do you have? What software are you using for EMR, CPOE, lab orders and billing? Anyone who has ever had to deal with the Internal Revenue Service, the EPA, OSHA or federal securities laws will recognize the sinking feeling that accompanies these sorts of requests for information. Whether it’s really “important” or “necessary” is a matter of opinion; in this case the opinion of members of the state Health Council.
Of course the Health Council’s database will be useless unless it’s maintained and up-to-date, which means that all of this information will need to be updated and re-submitted every year. Otherwise it wouldn’t be of any practical use. One immediate result is going to be a substantial increase in the administrative overhead faced by very healthcare facility in the state, along with a corresponding increase in their cost of doing business. This new cost will be incurred without delivering one iota of actual healthcare goods or services to anyone, anywhere in the state. By definition, the Council’s first act will be to lower the productivity of the healthcare system in Massachusetts. (Productivity is defined as the number of units of input (e.g., dollars), required to produce a unit of output (e.g., number of patients cared for).
Why would they want to do this?
The rationale offered by the law is that all of this information will assist the Council in “making determinations of need”. When it comes to healthcare, determining need is not just about what community needs a new clinic or a new MRI machine, but it’s also a tool that allows regulators to block the introduction of new medical resources into any community where they do not wish them to go. The reasoning is that the availability of facilities will cause them to be used, thus increasing the total cost of healthcare.
But lots of states and municipalities make determinations of need just fine every day without demanding this level of detailed reporting from every healthcare establishment in the state, much less doing so in perpetuity.
The only rational explanation for establishing this database is if the Health Council (or its surrogates) intends to insert itself more forcefully into the operational details of delivering medical care. While some readers might think that we’re being alarmist by simply mentioning the possibility of direct government control of – or at least interference in – the makeup and operation of even private medical facilities, the rest of the law seems to support the idea. Indeed, there seems to be no question that the government of Massachusetts is getting into the business of telling doctors and patients exactly what they’re expected to do, how, and when. Let’s let the law speak for itself.
The very next entity created by Mass Mandates 2 is the Health Policy Commission. This commission “shall be an independent public entity not subject to the supervision and control of any other executive office, department, commission, board, bureau, agency or political subdivision of the commonwealth.” In other words, it’s not answerable to anyone. The commission is governed by a board of eleven appointed people, including the secretary of health and human services, the secretary for administration and finance, and nine other health care policy and finance “experts” appointed by the governor, the attorney general and the state auditor. Only one doctor is allowed on the board: a primary care physician. (Medical specialists need not apply regardless of their qualifications.) An equal number of board members (i.e., one) shall be appointed to represent the interests of labor unions. Just to make sure that no one thinks that this commission can do pretty much anything it wants without having to answer to anyone, the law is explicit:
(d) Any action of the commission may take effect immediately and need not be published or posted unless otherwise provided by law.
The executive director may appoint other officers and employees of the commission necessary to the functioning of the commission.
The executive director shall not be required to obtain the approval of any other executive agency in connection with appointment of employees.
The money used to finance the commission and its activities is going to be coughed up by the very people and organizations that it intends to regulate:
Each acute hospital, ambulatory surgical center and surcharge payor shall pay to the commonwealth an amount for the estimated expenses of the commission.
One of the primary missions of the Health Policy Commission is to strictly regulate the cost of all healthcare goods and services provided by any organization providing a significant amount of healthcare goods and services to the public, regardless of who is paying for it. This is done by fining hospitals and clinics if the total dollar value of the goods and services that they provide increases faster than an arbitrary amount specified by the law – initially the rate of growth of state GDP, then less than the increase in GDP, followed by whatever limits might be set at the whim of the commission. Penalties for missing the targets will apply to groups and hospitals with more than $25 million in gross revenue; about a medium-sized group practice. The penalty? Initially it’s having to come up with a plan for coming into compliance, but if that doesn’t work (or the commission decides that it wasn’t good enough) providers can be fined a civil penalty of up to $500,000.
One interesting attribute of this regulation is that the government is imposing these regulations and penalties not based upon the cost of any particular item, nor based upon the inappropriate utilization of healthcare services, but based upon the change in cumulative total healthcare expenditures. There are many reasons why the total costs incurred by any particular healthcare institution or provider might rise at a rate greater than state GDP. The provider in question might, for example, experience increases in the cost of the medications or other supplies that it needs to treat patients. Or it might experience an increase in the number of older, sicker patients treated. Or it might even experience substantial cost overruns in government-mandated expenses such as electronic medical record systems or the administrative overhead needed to comply with new reporting requirements and try to raise prices to recoup the cost before going bankrupt. (Or even the new mandatory fees incurred to pay for the activities of the Health Policy Commission itself.) It really doesn’t matter. According to the law, the commission is obligated to crack down on sources of “excess” spending and bring them back into line with politically “acceptable” norms.
While it certainly sounds nice to say (as the law does) that the cost reductions will be managed by increasing “efficiency”, government management of healthcare almost universally works in the opposite direction. Since the same regulators imposing cost restriction have said that “quality” and “patient satisfaction” must not suffer at the hands of cost cutting, clinicians are presented with an impossible situation. How can you deliver friendly, “hands on” service if you’re required by law to be glued to a computer screen? How can one provide better clinical care if newer, more effective (but also more expensive) medications are denied a place in cost-conscious formularies? How is it sustainable for clinicians be held responsible for the total cost of care, when patients are under no obligation to take the medications or other treatments prescribed, or even take the most basic responsibility for their own care?
It is very, very difficult to see how these sorts hard-and-fast, yet mutually exclusive requirements can possibly be compatible with an effective and sustainable healthcare system. However they are perfectly in line with fostering an ineffective and unsustainable one.
We’ve only begun to scratch the surface of what’s required by the brave new world of Mass Mandates 2. There is LOTS more to come. The journey will continue in our next post on the topic.