HIMSS New England: Are Mass. hospitals living up to their reps?
NORWOOD, Mass. – Despite Massachusetts' reputation as a national leader in healthcare, "hospitals don't do well in our state," said Lynn Nicholas, FACHE, President and CEO of the Massachusetts Hospital Association, at the New England HIMSS annual Public Policy Forum on Wednesday.
Although there is a lot of innovation, "when we talk about the cost debate, we have some challenges," she said. Total margins saw a severe downturn from 2007 to 2008. Business is essentially flat, and "we’ve lost over 2,000 jobs from Massachusetts hospitals in the last two years. That’s significant because healthcare is the second-largest economic engine in the state, behind only retail, she said.
The state's healthcare reform law of 2006, which included an individual mandate, provided subsidized insurance for those who can’t afford it. "We realized we’d have to address costs," and in 2008, the state's healthcare cost containment law was enacted, said Nicholas. The law called for standardized billing and coding, computerized provider order entry and EHR adoption, and created a special commission on healthcare payment.
The association's recommendations included a shift to a global payment system. Global payment will include development of accountable care organizations (ACOs) that enable providers to “raft up” with whatever partners are needed to offer services to represent continuum of care. Providers can own all or a combination of owned and invited. An independent board will guide implementation, she said.
"Health IT is at the core of success for this concept," Nicholas said. "ARRA at the federal level has been a godsend because … a lot of hospitals can’t afford to make these investments...[There is a] digital divide in terms of capital availability and ability to invest in infrastructure." People are willing to step up to avoid rate regulation. For ACOs, you have to have a critical mass of 10,000 to 15,000 lives to manage risk through a full continuum of care. In most cases, hospitals will be at the core of ACOs, she said.
"Interoperable health IT is key – whether it’s connectivity between primary care physicians and acute care facilities ... whether it’s your quality agenda. In global payments, you have to know what’s happening in real time," Nicholas said. "IT and primary care physicians are king in the future, as far as I see it."
"Transparency is a huge issue," and quality consumer data and market information, based on common metrics, will be essential, according to Nicholas. "Transparency is really important but complicated: There are costs in the system that can come out. It’s a matter of how you do it and how you protect the weaker players as you do it." The reason coverage has worked so well in Massachusetts is that it really is a shared responsibility, she said.
"Everyone has a new responsibility they didn’t have before. For example, providers in this system reform have to be more transparent. IT will be instrumental, the federal government has to end chronic underpayment, employers have to drive changes in benefit design, employees have to reset their expectations, insurers have to transfer appropriate risk and reserves, commensurate with changes in benefit design," said Nicholas.
"I believe we can do it...We can show the nation how this can and should work."
Although there is a lot of innovation, "when we talk about the cost debate, we have some challenges," she said. Total margins saw a severe downturn from 2007 to 2008. Business is essentially flat, and "we’ve lost over 2,000 jobs from Massachusetts hospitals in the last two years. That’s significant because healthcare is the second-largest economic engine in the state, behind only retail, she said.
The state's healthcare reform law of 2006, which included an individual mandate, provided subsidized insurance for those who can’t afford it. "We realized we’d have to address costs," and in 2008, the state's healthcare cost containment law was enacted, said Nicholas. The law called for standardized billing and coding, computerized provider order entry and EHR adoption, and created a special commission on healthcare payment.
The association's recommendations included a shift to a global payment system. Global payment will include development of accountable care organizations (ACOs) that enable providers to “raft up” with whatever partners are needed to offer services to represent continuum of care. Providers can own all or a combination of owned and invited. An independent board will guide implementation, she said.
"Health IT is at the core of success for this concept," Nicholas said. "ARRA at the federal level has been a godsend because … a lot of hospitals can’t afford to make these investments...[There is a] digital divide in terms of capital availability and ability to invest in infrastructure." People are willing to step up to avoid rate regulation. For ACOs, you have to have a critical mass of 10,000 to 15,000 lives to manage risk through a full continuum of care. In most cases, hospitals will be at the core of ACOs, she said.
"Interoperable health IT is key – whether it’s connectivity between primary care physicians and acute care facilities ... whether it’s your quality agenda. In global payments, you have to know what’s happening in real time," Nicholas said. "IT and primary care physicians are king in the future, as far as I see it."
"Transparency is a huge issue," and quality consumer data and market information, based on common metrics, will be essential, according to Nicholas. "Transparency is really important but complicated: There are costs in the system that can come out. It’s a matter of how you do it and how you protect the weaker players as you do it." The reason coverage has worked so well in Massachusetts is that it really is a shared responsibility, she said.
"Everyone has a new responsibility they didn’t have before. For example, providers in this system reform have to be more transparent. IT will be instrumental, the federal government has to end chronic underpayment, employers have to drive changes in benefit design, employees have to reset their expectations, insurers have to transfer appropriate risk and reserves, commensurate with changes in benefit design," said Nicholas.
"I believe we can do it...We can show the nation how this can and should work."