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AIS's Health Business Daily
Featured Story June 18, 2008 Demands on Massachusetts Providers Illustrate Challenges of Covering the UninsuredReprinted from HEALTH PLAN WEEK, the industry's leading source of business, financial and regulatory news of health plans, PPOs and POS plans. By Steve Davis, managing editor, (sdavis@aispub.com) Just a year after implementing a groundbreaking health reform initiative in Massachusetts, the uninsured population in that state has been slashed nearly in half (from 13% to 7%), according to a June 3 report from the Urban Institute in Washington, D.C. But a spike in demand for services from the newly insured has stretched the state's already-limited primary care providers even thinner, the Boston Globe reported May 29. The article cites a waiting list of 150 to 200 patients at one clinic, and the difficulty other organizations have had in filling vacant primary care physician slots. Industry observers tell HPW that the experience in Massachusetts could point to potential problems that other states, or the nation, could face if health coverage is expanded too rapidly. The experience in Massachusetts illustrates that access to insurance is not synonymous with access to care, says Devon Herrick, Ph.D., a senior fellow with the non-partisan National Center for Policy Analysis. "Some of the problems residents of Massachusetts are experiencing are characteristic of what we can expect across the country" if the uninsured population is reduced too quickly, he tells HPW. "This will especially be true of places that expand [State Children's Health Insurance Programs] and other subsidized health coverage programs." Primary care providers, he explains, will find it difficult to keep up with the increased demand and will have little financial incentive to see patients covered by a plan that offers lower-than-average reimbursement. Carlton Doty, senior analyst at Forrester Research, Inc. in Cambridge, Mass., agrees and says "the [state] policy-makers are beginning to find out that mandating health coverage for all does not equate to actual health care for all. They are also getting a wake-up call about the associated costs, and that universal coverage, while a noble intention, does absolutely nothing in terms of cost containment." According to the Urban Institute report, which is largely complimentary of the state's reform efforts, the cost of the program was nearly $150 million more than the $869 million allocated for the program. The program exceeded initial cost projections because the number of uninsured adults was much higher than the state anticipated, the report says. New Enrollees = New Challenges for Plans For health plans, a significant decrease in the uninsured population could translate to some steep up-front costs as new enrollees receive coverage and health problems are identified and treated. Health plans would need to determine the percentage of healthy enrollees vs. unhealthy ones, says Paul Fronstin, senior research associate at the Employee Benefit Research Institute in Washington, D.C. "Hopefully the treatment costs would be lower over time, but it will be costly upfront," he says. But not everyone who is uninsured is unhealthy. Some people choose not to have health coverage simply because they are young and healthy, he adds. In the short term, health plans will not be able to increase premiums enough to offset the spike in utilization caused by a reform strategy, says Peter Kongstvedt, Ph.D., a partner in the health and managed care consulting services division of Accenture, Ltd. He adds that this would be an even bigger problem if the system guarantees coverage for all residents and allows people to opt out of coverage. Doty agrees and says health plans could find it difficult to contain medical costs if the legislation includes a guaranteed-issue mandate. Smaller health plans that have not connected the need for medical management with underwriting would have the most trouble succeeding in a guarantee-issue environment, says consultant William DeMarco, president of Rockford, Ill.-based DeMarco and Associates. "Larger plans that can juggle premium subsidy and tier out providers and payment of benefits will have the advantage," he says. Health plans also would need to expand their provider networks to meet the demand caused by a rapid increase in the number of covered lives, says Sara Rosenbaum, chair of the Department of Health Policy at the George Washington University School of Public Health and Health Services. "The same effects being felt in the [provider] setting will be felt up the line," she says. "Health plans may be hard pressed to live up to their network obligations." Reform Could Increase Provider Shortages Pent-up demand among the previously uninsured could lead to a surge in people seeking primary care services if a large percentage of the uninsured population were suddenly covered. But the increased demand would likely level off and decline as the newly insured are integrated into the system, Fronstin says. That pent-up demand will be especially apparent among the uninsured population between the ages of 55 and 65. Some of them put off health care until they become eligible for Medicare, adds Kongstvedt. If provider shortages are not addressed, a health reform initiative is likely to overwhelm providers and "would send the entire industry into a panic to find more efficient means of delivering routine care," Doty says. But that could prompt lawmakers to consider new initiatives to encourage medical students to pursue careers in primary care and existing providers to remain there. Retail clinics also would prosper, but could be overwhelmed by the increased demand. The higher demand for care also could encourage growth in online health care delivery and telemedicine, Doty says. According to the Massachusetts League of Community Health Centers (MLCHC), 10% of primary care positions in health centers statewide are vacant. In some parts of the U.S., access to care due to a shortage of primary care providers already has become apparent among Medicare Advantage (MA) enrollees, Kongstvedt adds. However, he notes that some MA enrollees are better off than those with fee-for-service Medicare, which typically reimburses physicians at a lower rate. "If we reform the existing system and increase the number of uninsured to any degree, what you are seeing in Massachusetts is going to happen everywhere," he says. Kongstvedt says that before covering the uninsured, new models must be created to reward primary care providers. According to the Urban Institute study, low-income adults reported more trouble finding a health care provider or getting an appointment with a provider under the reformed system than did high-income adults. The study notes that this increase could reflect the difficulty newly insured individuals had in navigating the health care system, and the stress on providers from more people seeking care. Michael Cannon, director of health policy studies at the libertarian-oriented Cato Institute in Washington, D.C., says strict licensing laws in Massachusetts have made it difficult for physicians to practice in the state. "This just highlights what I've said all along about Massachusetts: It forces more money and more people into a broken system, without doing anything to fix the system," he says. At least one program
is taking steps to change the situation in the state. Last month, the
MLCHC said its year-old loan-repayment program for medical and nursing
students had led to commitments from 35 physicians and 12 nurse practitioners
to work in the state for two to three years. Through the program, participants
can receive up to $25,000 a year for up to three years to help repay
student loans. The $1.7 million dollar program is funded largely by
the state. The Blue Cross Blue Shield Foundation provided a $250,000
grant to the program. |
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