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The Podium

Health-care integration, not isolation

There is probably one point about health-care reform that everyone in Washington can agree about: It isn’t easy. That hasn’t stopped Massachusetts from staying the course and pursuing the so-called “Triple Aim” goal of a reformed health-care system: better health, better care, and lower cost.

There may not be universal agreement about the best way to reach our ultimate goals, but there is considerable consensus on the attributes that such a redesigned health-care system would possess. A transformed system would provide seamless transitions along the continuum of care; it would be simple enough that the public would not need a medical degree to understand it; it would be sensible enough to invest in public health and preventative care; and it would create aligned incentives so that patients, care givers, government regulators, and commercial insurers were all working toward achieving the “Triple Aim.”

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Those attributes don’t adequately exist in today’s health-care system, but we are getting there.

We have to move from current isolated islands of care by building connections among care givers. If we are going to have the resources available to both promote health and to deliver care to everyone in an effective and efficient manner, we need better coordination, communication, and collaboration. Caregivers throughout the continuum of care will need to come together in creative ways from clinical affiliation to mergers to new partnerships such as “accountable care organizations.”

Some call that development “consolidation” and some level of consolidation is as inevitable as it is invaluable. For patients who justly feel lost or confused in the current delivery system; for policymakers who realize that behavioral health problems need to be integrated into the physical care system; for employers who demand greater efficiency in the delivery of care; for government that continually pays caregivers less than the actual cost of care; and for insures who shift their financial risk onto providers, the coming together of caregivers offers a compelling and sensible solution.

Does coming together mean that local community hospitals and smaller physician practices will disappear? No. But the consolidation is a national trend and it won’t go away. The IT resources required to marry clinical and cost-of-care data, invest in state of the art technology, and train and deploy care managers and health coaches to engage patients outside of the acute care setting will be considerable. So every provider will need to adapt and many will need to connect to other providers. And, they will. The biggest challenge falls upon the hospitals that serve economically strained communities. These are the hospitals that suffer the most from low government and commercial insurer payments. They will require meaningful support through the transition of the health-care system.

Government and the insurance industry shouldn’t send out conflicting signals: rapidly build new integrated systems of care that can produce effective and efficient care, but on the other hand say don’t build connections to other providers. Such mixed signals are surfacing.

The insurance industry’s position of opposing provider consolidation is perplexing because their new insurance products increasingly require scale and resources, most easily achieved through greater provider consolidation. Their position is also quite ironic since just three commercial insurance companies control 80 percent of the private health insurance market in Massachusetts. Those same insurers sit upon hundreds of millions of dollars in excess financial reserves even as they shift more of their financial risk onto providers.

Government is also developing payment and delivery models for Medicaid, Medicare, and insurance products for state employees that push providers into greater consolidation. More than 55 percent of hospital patient admissions come from government programs and its share is growing, so what government requires of providers matters a great deal.

Are there sound policy reasons for inquiring into the consolidation trend among providers? Yes. Consolidation, whether by providers or insurers, should be placed under appropriate scrutiny. That is exactly what Chapter 224 already does for providers. Provider consolidation, as should be the case for insurer consolidation, must be about improving the health-care system along the lines of the “Triple Aim,” not simply focused on revenues.

Government should hold providers and insurers accountable, but it should not presume that consolidation is necessarily bad nor should it create needless and reactionary barriers to consolidation. It is also critically important that any review criteria be clear, objective, transparent and reasonable, and applied consistently and without undue delays.

A key aspect of accountability is transparency. That is why we encourage the insurance industry to support pending legislation that will increase the transparency of data for health-care consumers by requiring the Division of Insurance to make current insurer public filings publicly available on the Division website in a manner that is easily accessible. The insurance industry has opposed this consumer information legislation, and in the spirit of a more accountable health-care system this would be a good time to change that position.

Lynn Nicholas is president and CEO of Massachusetts Hospital Association.
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