One more bureaucracy

Last week, the Massachusetts House of Representatives released a bill  proposing big changes to how we pay for health care. While it consolidates a few  state agencies, the House bill creates a massive new agency, the Division of  Health Care Cost and Quality. The Division is given broad regulatory powers that  can reach into most aspects of health care. Since the Division’s management will  decide where billions of dollars will be directed and how millions of lives are  treated, do we trust their judgment?

Strikingly, the Division will be independent and “not subject to the  supervision and control of any other” public entity. Given that health care  contributes to 18 percent of our state’s economy, are we comfortable with  bureaucrats having so much power? Do we think they will have the expertise,  resources, or shared values that we do to balance the tradeoffs associated with  government-centered cost controls?

The controversial federal Affordable Care Act (ACA) was pilloried for  granting the Secretary of Health and Human Services liberal authority to act on  major policy roughly 700 times in 2,700 pages. This new Massachusetts bill  outdoes the ACA, instructing the Division to act on policy almost every  page  — 163 times in 178 pages. The bill mandates action 941 times, using  the legal term “shall.”

The new Division is given a dizzying array of responsibilities. It will  assess a number of penalties, fines, and surcharges on hospitals, insurers, and  others. There are 26 such fees in the bill. Some fees are levied once, others  are reoccurring and some are sticks to be utilized by government to guarantee  compliance to state mandates. You can bet the costs will be passed onto  patients.

The Division will set “acceptable” standards for new methods to pay for  health care called alternative payment methodologies. It will develop quality  metrics for our care but limits insurers’ use of extra or better quality data  outside of these approved metrics.

The Division will define and oversee how our medical care is coordinated in  newly mandated accountable care organizations (ACO), networks of medical  providers that, in theory, will help better organize your care.  (By the  way, research on the effectiveness of ACOs and alternative payment methodologies  to save money is mixed.)

But we are moving ahead with both anyway.

The Division will design and manage the statewide health technology  infrastructure needed to meet the mandated statewide 5-year window for all  providers to be using health IT contained in the bill. It will implement  extensive mandated transparency mechanisms for consumer education on cost and  quality data.

Of  course, you cannot legislate reality.  And the reality is as that  transparency without the right incentives for consumers leads nowhere.
For many patients, high-cost still correlates with higher quality in medicine.  A recent report from Attorney General Coakley proved this theory wrong. But  simply providing patients with cost data without incentives in their health plan  to choose the low-cost high-quality provider, will mean that many will select  the most expensive care.

The Division’s mandate to establish uniform reporting, by statute must align  with federal standards. Will the Division follow the federal ACA’s lead  establishing 140,000 coding categories? (Will patients bitten a second time by a  turtle use billing code W5921XD?)
Will the Division have the expertise  and technological knowledge to implement the many goals laid out in the bill?  Consider the last state health care reform in 2006 and its health Care Cost and  Quality Council. It boasted a great advisory board but struggled to produce a  meaningful web product with wide market penetration.
Lawmakers should  ask if it is a good investment to ask a public entity to run so much, especially  since many of the new Division functions will be replicating activities already  done in the private and non-profit sectors. What will the Division cost to run?  The smaller Connector created in 2006 costs roughly $30 million a year to  operate. How much more should we expect this mega-agency to cost?
And  then there is the privacy of health information. The bill currently waves its  hand at this complex and expensive issue, and serious thought is  required.
The House bill’s language is rife with punts on the hard  issues. The Division is instructed broadly to “take actions necessary to  ensure….” or “promulgate regulations or guidelines to implement the findings of  this section.”  The Division’s management will be instrumental in shaping  the future health care you receive in the Commonwealth.
Do we trust  their judgment?