IV. The Massachusetts Initiative

A. Preliminary Overview

 On April 12, 2006, Massachusetts Governor Mitt Romney signed into law An Act Providing Access to Affordable, Quality, and Accountable Health Care. Widely heralded as a first in the nation in its attempt to provide universal health care, the legislation uses a combination of Medicaid expansion, subsidized private insurance programs, and insurance market changes to accomplish this goal. This part of the article will provide a broad overview of the provisions in the Massachusetts Health Care Reform statute focusing particularly on those provisions aimed at eliminating disparities.

 Passage of this landmark legislation took place in a context where other public and private actors had been identifying health disparities and taking steps to address them. In June 2005, the Boston Public Health Commission documented the health disparities experienced by the Black, Latino, and Asian residents of Boston in a report entitled Data Report: A Presentation and Analysis of Disparities in Boston. Key findings of the report were that Black Bostonians have worse health than all other residents over a range of health indicators and that Latino Bostonians have worse health indicators than White residents on several health indicators. The Boston Data Report also found that socioeconomic factors play a role in health disparities, but that the generally lower income and education levels of Black and Latino Bostonians did not explain fully the health disparities. Personal behavior, such as smoking, also did not explain the disparities. The report concluded that real or perceived racism at a systemic and individual level erected barriers to health care for these populations.

 In addition to the work of the Boston Public Health Commission, the state legislature created a Special Commission to End Racial and Ethnic Health Disparities that issued a report and recommendations in August 2007. Co-Chaired by a member of the House of Representatives and of the Senate, the Commission made a series of recommendations including establishing a state center for the elimination of disparities and focusing on workforce development issues to create better racial and ethnic diversity in the health professions. Various private academic medical centers in Massachusetts, also, are actively engaged in research and interventions to address health care disparities. Finally, a number of advocacy organizations interested in bringing attention to the disparities issue has formed a Disparities Action Network (DAN). The DAN developed proposed legislation to expand on the provisions in Chapter 58 relating to disparities.

 While trumpeting the enactment of this legislation, commentators note that unusual circumstances in Massachusetts made it realistic for the state to aspire to universal coverage. First, at the time the statute was enacted, a strong foundation of employer-sponsored insurance existed, along with a generous Medicaid program, resulting in 68% of the non-elderly population having some form of employment-based insurance coverage, compared to 61% nationally. Only about 10% of the population was uninsured, compared to the national average of 16%. By comparison, Texas has an uninsured population of nearly 28% and before Hurricane Katrina, 22% of Louisiana's, 19% of Mississippi's, and 15% of Alabama's non-elderly populations were uninsured.

 In addition, Massachusetts already spends a great deal of money each year to compensate hospitals and community health centers treating the uninsured, using payments from insurers and self-insured employers as well as state and federal funds. Despite these advantages, commentators noted that achieving the goal of universal coverage would be challenging. For example, the funding mechanisms established in the legislation will not pay the full cost of subsidizing health insurance for all of the uninsured. Second, implementation depends on promulgating new regulations and administering the programs effectively. The state will need to obtain Medicaid waivers from the United States Department of Health and Human Services for the Medicaid expansions contained in the legislation. This waiver will need to be renegotiated in 2008. Another challenge is determining what are “affordable” insurance products for individuals who are uninsured but who are not eligible for any subsidies under the legislation. It is not clear whether employers will continue to provide insurance under the new regime. Finally, the state will need to be committed to sustaining the program through less favorable economic times, when state tax revenues decline, Medicaid rolls increase, and the number of uninsured increases through unemployment.

B. Key Provisions of the Legislation

 As of July 1, 2007, all state residents over age 18 are required to have a minimum level of health insurance. Residents must demonstrate that they had health insurance meeting the requirements of the statute during the previous year on their annual state income tax returns. Failure to do so will result in tax penalties of up to 50 percent of the cost of a health insurance plan as long as an affordable insurance product was available to them.

 The statute makes assistance available to low-income and self-employed individuals toward the cost of purchasing health insurance. The Commonwealth Care Health Insurance Program will make subsidies available if gross family income does not exceed 300 percent of the federal poverty level. No contribution toward the cost of the health insurance is required for persons whose income is less than 100 percent of the federal poverty level. The law also extended eligibility for MassHealth, the Massachusetts Medicaid program, to children of families earning up to 300 percent of poverty. MassHealth coverage was restored for some dental care. In 2006, the federal poverty guidelines were $9,800 for individuals and $20,000 for a family of four.

 Employers, as well as individuals and the state, have obligations under the new health reform statute. Entities employing more than 10 full-time employees that do not provide health insurance for workers or contribute to it will be assessed an annual surcharge of $295 per employee and will be assessed a “free-rider surcharge” when their employees use more than a specified amount of care from a state “health safety-net fund” .

 Finally, the statute mandates certain market reforms with the aim of making insurance more available and affordable to Massachusetts residents. The statute creates the Commonwealth Care Health Insurance Program to be managed by the Commonwealth Health Insurance Connector.

 In addition to these very specific provisions designed to enhance access, the statute creates mechanisms designed to focus the attention of Massachusetts health care regulators and health care providers on measuring and improving the quality of care delivered. These provisions are described here.

 The Health Reform legislation creates a Health Care Quality and Cost Council within, but not subject to the control of, the Executive Office of Human Services. This Council is charged with setting health care quality improvement and cost containment goals. The goals are to be designed to promote high-quality, safe, effective, timely, efficient, equitable and patient-centered health care. The statute designates the Secretary of Health and Human Services as the chair and specifies certain officials, or their designees to serve as members, including the Executive Director of the Group Insurance Commission and the Insurance Commissioner. Seven of the members are appointed by the governor and are to include representatives of the health care quality improvement organization recognized by the Centers for Medicare and Medicaid Services, a representative of the Institute for Healthcare Improvement, Inc., representatives designated by the Massachusetts Chapter of the National Association of Insurance and Financial Health Underwriters, the Massachusetts Medicaid Policy Institute, and an expert in health care policy from a foundation or academic institution, and a nongovernmental purchaser of health insurance.

 The statute directs the Health Care Quality and Cost Council to “develop and coordinate the implementation of health care quality improvement goals intended to lower or contain the growth in health care costs while improving the quality of care including reductions in racial and ethnic health disparities.” The Health Care Quality and Cost Council is to prepare, or contract with a consultant to prepare, a consumer health information website and reports on the cost and quality measures developed. Health insurers and health care providers are required to submit data specified by the Health Care Quality and Cost Council through regulation. Annually, the Health Care Quality and Cost Council is to establish and publish performance measurement benchmarks for its goals. The statute specifies that the performance measurement benchmarks be clinically important and include both process and outcome data and “allow and encourage physicians, hospitals, and other health care professionals to improve their quality of care.”

 The Health Care Quality and Cost Council is required to maintain a consumer health information website to assist consumers in making informed decisions about health care and informed choices among health care providers. Information is to be presented in a format understandable to the average consumer. The website is to include service specific and general patient satisfaction and patient safety information. Finally, the Health Care Quality and Cost Council is to establish an advisory committee of at least twenty-four members, at least one of which is to be “a representative of a racial or ethnic minority group concerned with health care.” Members of the Health Care Quality and Cost Council do not receive a salary and only receive reimbursement for expenses. In addition to having the authority to issue regulations advancing its goals, the Council is authorized to make grants and loans to members of the health care industry.

 Another provision of the legislation creates the MassHealth Payment Policy Advisory Board which performs certain functions including recommending Medicaid rates and payment methodologies. The goal is for these rates and payment methodologies to provide fair compensation for services and to promote high-quality, safe, effective, timely, efficient, culturally competent and patient-centered care. Members of this board include the secretary of health and human services or his or her designee, the commissioner of health care financing and policy, and twelve other members to be appointed by the leadership of the legislature, the Governor, and certain industry and consumer groups. The board is to be staffed by the division of health care finance and policy designated by the executive office of human services. The board is required to make semi-annual reports to the legislative ways and means committees and to the joint committee on health care financing. In addition, it must make a detailed report of proposed payment policies to the same bodies ninety days before implementation.

 In addition to the provisions directly aimed at expanding the availability of health insurance, the legislation contains a number of other provisions specifically aimed at reducing racial and ethnic disparities in health care and health outcomes. Already mentioned is the requirement that at least one member on the advisory committee to the Health Care Quality and Cost Council be a “representative of racial and ethnic groups concerned with health care” . Significantly, the legislation requires the creation of a Health Care Disparities Council in, but not subject to the control of, the executive office of human services to make recommendations on eliminating disparities in health care and health outcomes and on addressing diversity in the health care workforce. In addition, the Health Care Disparities Council is charged with making recommendations on other matters affecting health disparities including the environment and housing. The Health Care Disparities Council is charged with addressing diversity and shortages in the health care workforce. Membership of the Health Care Disparities Council is set at thirty-four, including three members each of the House and Senate to be designated by the Speaker of the House of Representatives and the Senate President. The Speaker of the House of Representatives and the Senate President are each to designate one representative to serve as co-chair of the commission. Other Health Care Disparities Council members include representatives of various associations focusing on particular diseases or conditions, and representatives of the Boston Public Health Commission, the Office of Multicultural Health in the Department of Public Health, the Program to Eliminate Health Disparities at the Harvard School of Public Health, as well as four members appointed by the Speaker of the House and four members appointed by the President of the Senate who represent communities disproportionately affected by health disparities. The Health Care Disparities Council is required to file an annual report on these topics with the legislature. The annual reports are to contain recommendations for “designing, implementing and improving programs and services, proposals for appropriate statutory and regulatory changes to reduce and eliminate disparities in access to health care services and quality care and the disparities in medical outcomes in the Commonwealth.” In addition, the annual reports are to “address diversity and cultural competency in the health care workforce” including, at a minimum, recommendations relating to doctors, nurses and physician assistants.

 As of this writing, it appears that formation of the Health Care Disparities Council is not yet complete. Both houses of the legislature have identified the legislative members of the Health Care Disparities Council and the Speaker of the House of Representatives and Senate President have identified the community representatives. Publicly available materials indicate that this group has not met as of this writing.

 Section Six of the health reform statute requires the creation in the Division of Insurance of a health care access bureau and creates a position of deputy commissioner for health care access to oversee the health care access bureau. The bureau oversees the individual and small group health insurance markets, has oversight of affordable health plans, including coverage for young adults, and disseminates information to consumers on these topics.

 The statute also authorizes certain pay-for-performance initiatives. After one year, it makes hospital Medicaid rate increases contingent upon adherence to quality standards and achievement of performance benchmarks, including reductions in racial and ethnic disparities in the provision of health care. The office administering the Medicaid program is required under this provision of the statute to consult with the Health Care Quality and Cost Council (HCQCC) in developing the quality standards and performance benchmarks on which increases are to be based.

 The HCQCC met for the first time on August 23, 2006, and has met approximately on a monthly basis since that time. On June 21, 2007, the HCQCC announced its first set of annual statewide goals for improving quality and controlling the cost of health care in Massachusetts. Goals identified include reducing the annual rise in health care costs to no more than the unadjusted growth in Gross Domestic Product by the year 2012 and eliminating hospital infections by 2012. In addition, the goals call for eliminating “never events,” defined as events that should never happen in hospitals such as performing the wrong surgery on a patient, performing surgery on the wrong part of the body, or performing surgery on the wrong patient. Improving the management of chronic conditions, developing useful measurements for improving adherence to patients' wishes for end of life care, and promoting quality through development of a website and other materials providing comparative quality information are also identified as goals. Reducing racial and ethnic disparities in a variety of contexts was identified as a goal. Specific targets for this goal include reducing health care-associated infections, eliminating disparities in “never events,” reducing--and ultimately eliminating--disparities in disease complication rates, re-admission rates, and avoidable hospitalizations, and reducing disparities in screening and management of chronic illnesses.

 This legislation signals an intent to establish some measure of insurance coverage for all Massachusetts residents and to address disparities while improving the overall quality of care. It is not clear, however, that administrative structures and the long-term commitment are present to achieve these goals.