V. Evaluating the Potential of the Massachusetts Tools to Affect Disparities
As described in Part IV, the Massachusetts Health Care Reform legislation provides several incentives aimed at addressing disparities in health care. In Part V, the article first will discuss the insurance mandate and MassHealth expansions, which aim to influence individual behavior in obtaining health insurance coverage and in using health care services. Next, the financial incentives for providers will be discussed. This section will conclude with an examination of other incentives contained in the legislation, such as public reporting and informational efforts.
A. Insurance Mandate
As described previously, the Massachusetts Health Reform statute requires all Massachusetts residents over age eighteen to demonstrate a minimum level of insurance coverage by December 31, 2007. The literature is clear that lack of insurance is one of the causes of health disparities. Also, the literature demonstrates that insurance expansions are not sufficient to eliminate health care disparities. While mandating or equalizing benefits for diverse populations will ameliorate disparities in health insurance coverage, less clear, however, is whether equalizing coverage will result in equal use of the health care system by these diverse populations. In fact, research has shown that such provisions, without more interventions can exacerbate disparities because whites and higher-income populations will make greater use of expanded benefits than non-whites and lower-income populations. For example, the experience of the Medicare program demonstrates the problem. Despite theoretical equality in insurance coverage provided to the population over the age of sixty-five by the Medicare program, racial and ethnic health disparities persist, including the utilization of health care services covered by Medicare. Another study has found that even when insurance benefits and access are constant, whites and higher-income individuals consume more mental health care services and pharmaceuticals than racial and ethnic minorities and lower-income populations.
Cost of coverage may be another barrier to achieving even the threshold benefits from expanded coverage. Individuals will be penalized under the insurance mandate if they fail to take advantage of affordable options for health insurance.
One of the early challenges facing the Commonwealth Health Insurance Connector Authority, the agency created “to facilitate the availability, choice and adoption of private health insurance plans,” was to balance the need for individuals to have meaningful coverage with the potential cost of comprehensive insurance coverage. In regulations effective July 1, 2007, the Connector specified that insurance meeting the definition of “creditable coverage” for purposes of fulfilling the insurance mandate must provide a range of medical benefits “including, but not limited to, preventive and primary care, emergency services, hospitalization, ambulatory patient services, prescription drugs, and mental health services.” Deductibles are capped at $2,000 for individuals and $4,000 for a family, and prescription drug deductibles are capped at $250 for individuals and $500 for a family. Deductibles or co-insurance for services may not exceed $5,000 for an individual and $10,000 for a family.
Pursuant to its regulations, the Connector had established affordability standards and guidelines by June 2007. Individuals with incomes up to 150 percent of the federal poverty level do not pay premiums and individuals with incomes between 150 percent and 200 percent of the poverty level are to pay premiums starting at $35 per month. The Connector has estimated that up to two percent of the Massachusetts population will not be able to find insurance that is deemed affordable and that meets the coverage standards.
It is not clear that the premiums and public subsidies will be sufficient to allow uninsured or underinsured individuals to obtain coverage. Media reports indicate that the numbers of people seeking subsidized insurance, and the demand for information about the subsidized health insurance plan, have overwhelmed the MassHealth and Commonwealth Care administrative functions and state call centers. Finally, it remains to be seen whether state resources will be able to meet the demand for assistance with health insurance coverage in the face of competition for scarce governmental resources.
Expansion of the state's Medicaid program, MassHealth, is key to accomplishing the goal of universal coverage. It is not clear whether future waiver extensions will be forthcoming from the federal government. This uncertainty means that the long-term viability of certain aspects of the coverage goals are not fully within the state's control.
The Massachusetts legislation also contains some premium reduction incentives for enrollees in MassHealth. In addition to restoring dental services, the statute authorizes the Executive Office of Health and Human Services to implement a wellness program to encourage MassHealth enrollees to engage in “activities that lead to desired health outcomes, including smoking cessation, diabetes screening for early detection, teen pregnancy prevention, cancer screening for early detection and stroke education.” Enrollees complying with the relevant wellness program would be eligible to receive reductions in MassHealth premiums or co-payments, or both. Whether such incentives will be successful in improving health outcomes or reducing disparities will be interesting to monitor.
B. Financial Incentives for Providers
The research literature demonstrates that financial payments to providers create incentives to reduce the costs of health care services by reducing the use of health care resources, improving compliance with practice guidelines, and achieving health targets. One year after the effective date of the new health reform statute, the Medicaid program is authorized to increase payment rates to hospitals based on the achievement of performance benchmarks, including reducing racial and ethnic disparities. These financial incentives are to be structured with reference to the benchmarks established by the Health Care Quality and Cost Council created by chapter 6A, section 16L of the Massachusetts General Laws.
Public and private entities that pay providers for health care have begun paying hospitals and physicians for improving quality of care. Such financial incentives do promote improvement in the types of care that are measured and rewarded by the incentives. A study of a voluntary public reporting initiative, a pay-for-performance demonstration project, coupled with reporting sponsored by the Centers for Medicare and Medicaid services, concluded that hospitals involved in reporting and pay-for-performance obtained somewhat greater improvements in quality than hospitals only engaged in reporting. The incentives involved in the study were relatively modest, in the range of 1 percent to 2 percent. Based on this research, it appears that the goal of the Massachusetts legislation, to couple reporting with pay-for-performance in the Medicaid program, may be able to achieve improvements in the quality of care.
The literature also raises some concerns about pay-for-performance programs and the impact of such programs on health care disparities. In the study of Medicare incentives, most of the bonus payments went to hospitals with the highest baseline performance, even though all participating hospitals improved performance by similar levels. This result means that care must be taken in the design of incentives to avoid exacerbating disparities. Research has indicated that financial incentives can cause providers to engage in “cherry picking”--avoiding patients with poorer health status who might jeopardize achieving performance benchmarks. Also, rewarding absolute performance may result, over time, in shifting incentive payments and overall resources to hospitals already performing at a high level and away from lower-performing hospitals. As racial and ethnic minorities generally receive care from different providers than the majority population--e.g., from safety-net hospitals--such a shifting of resources could further exacerbate disparities in health care. Even if the baseline performance of hospitals is high, interest in pay-for-performance initiatives may erode over time among hospitals that repeatedly fail to obtain bonus payments. Although every system seeks to avoid paying for substandard care, even competent providers could be left vulnerable over time under a system in which they never receive bonus payments. To avoid these effects that have the potential to conflict with the goal of reducing disparities, Massachusetts should consider structuring incentives to reward all improvement from established baselines, or for achieving certain thresholds. Given these parameters, incentives should be structured to promote elements of good practice such as adhering to practice guidelines, following chronic disease management protocols, tracking immunization rates, measuring improvements in outcomes for specific diagnoses and conditions, rewarding time spent with vulnerable patient populations, improving access for LEP populations, improving cultural competency, and enhancing workforce diversity.
After experience with positive incentives, negative incentives for institutions that fail to improve are often considered--such as imposing higher copayments for receiving services at low-performing providers. To the extent that access barriers, such as access to information about quality and transportation, persist, it may not be possible for disadvantaged populations to respond to these negative financial incentives. Under that scenario, higher copayments could further exacerbate health care quality disparities.
Finally, one goal of the legislation is to reduce the spiraling costs of health care. It remains to be seen whether the goals of improving quality, including reducing racial and ethnic disparities, and reducing costs are compatible. These goals may impose divergent pressures on the implementation of the legislation.
C. Other Incentives to Address Disparities
The Massachusetts health reform legislation also relies on improving information available to consumers about health care services and providers as a way to address quality. Relying on the website to be maintained Health Care Quality and Cost Council may not be effective in communicating with disadvantaged populations who are adversely affected by disparities. In fact, the availability of this information to more sophisticated health care consumers could exacerbate disparities by enhancing and improving their choices and leaving populations already disadvantaged by access barriers in a worse position. While the legislation requires a focus on the website, in order to close the informational divide between disadvantaged and advantaged consumers or prevent it from growing, the agency will need to employ other tools to communicate successfully with consumers of Limited English Proficiency and of all races, ethnicities, and socioeconomic backgrounds. Also, to the extent that the data on which policies will be based and progress toward goals is measured depends on collecting information from patients and consumers, communication tools must be developed that will elicit responses from all populations.
Finally, it is not clear that the administrative infrastructures are yet in place to work toward the goal of reducing racial and ethnic disparities. The legislation does not allocate discrete staff to the Health Care Disparities Council, but instead relies on the generosity of existing public agencies to assign staff to support the work of this body. There is evidence that the existence of an entity focused on addressing health care disparities is an essential element of successful state strategies, so the creation of the Health Care Disparities Council is a positive step. Failure to fund operations or provide administrative staff to advance the work of such a group could impair its effectiveness. The initial struggles of the agencies charged with implementing the insurance coverage mandate cause one to be cautious about expectations for immediate success.
