Transcript The Massachusetts Picture-
The Massachusetts Picture The Last Twelve Months
Nancy Turnbull Massachusetts Medical Society “State of the State” October 27, 2005
“Leave No Health Care System Behind” Initiative
“Massachusetts Medical Aura Comprehensive Assessment System”
MA-MA-CAS
Sector Hospitals
First MA-MA-CAS Results
Grade (how has sector fared)?
B+ (Range: A-F) Progress in last 12 months? Areas for Improvement?
-Finances improved -Managing growing uninsured -Growing traction on quality -COSTS!
-Gaps between haves and have-nots -Housing prices Physicians B Nursing homes Home health Health Plans B -Finances improving -Labor situation improving -Pediatric nursing C+ A ( Range: A to C) Finances Strong Need more concrete policy strategies to deal with changing role -Making interest in community LTC real Affordability -Reengagement in health system transformation
Sector
First MA-MA-CAS Results
Community Health Centers Medicaid Uninsured Consumers Public Health Quality Grade Progress in last 12 months C B F D D I Some Medicaid rate relief Many cuts restored Substantial funding increase Several major coverage proposals underway ???????????????????????????
9% funding increase for FY05 (+$33 million) Lots of activity Lots of collaboration Areas for Improvement •Pressure from rise in uninsured •Immigrants •75,000 eligible but not enrolled •460,000+ people waiting for coverage Access, Quality, Affordability Restoration of 30% funding cut over past 3 years Every area
One Year Later: October 2005
• • • • •
Positive financial results for most health care organizations Increasing number of people without insurance Rising health costs
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3-5 times rate of increase in overall inflation and workers’ earnings
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Stagnant median family income Very active health reform debate Crowded but uncoordinated quality landscape
Massachusetts Hospital Margins Are Up
Massachusetts Hospital Margins: 1998 –2005(Q2) 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% 2.0% -1.2% 1.2% 1.1% 1.1% -1.0% 0.8% -0.6% 0.4% 0.1% 1.0% 0.1% 1.6% 0.9% 3.0% 1.5% 1998 1999 2000 2001 2002 2003 2004 2005 (2Q) Total Margin Operating Margin
Based on latest available DHCFP financial statements (1996-2004) and MHA Surveys Q2 2005 (n=55) Numbers are weighted averages
10% 5% 0% -5% -10% -15% -20% -25%
Q2YTD 2005 Operating Margin Distribution
3% Margin Line Ma Median Operating Margin
Based on 55 Hospitals
6% 5% 4% 3% 2% 1% 0% -1% -2% -3%
Massachusetts Hospitals Total Margin Trend, FY00-FY05 (3Q)
75th Percentile 50th Percentile 25th Percentile 3.9% 1.0% 3.9% 0.9% 2.7% 0.4% 3.2% 1.3% -1.8% FY00 -2.1% FY01 -2.0% FY02 -1.8% FY03 FY04 3.7% 1.9% 0.3% 5.5% 3.2% 0.8% FY05 Q3
Source: DHCFP, MHA
Massachusetts Hospital Margins: 2Q 2005
5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 4.1% 2.3% 2.6% 0.6% Major Teaching Community Total Margin Operating Margin
Community Hospitals: 41% of had negative operating margins (17/41) and 27% (11/41) had negative total margins Teaching Hospitals: 14% (2/14) had negative operating margins and 14% had negative total margins.
Hospitals
• Financial results continued to improve and overall profitability was much better in aggregate in last 12 months – Best overall financial results in past decade • Discharges and days slightly down – Flat at teaching hospitals; down at community hospitals • Outpatient and ED visits up overall – Increases at teaching hospitals; declines in community • Wide range in performance “The ability to cover long-term obligations remained a serious concern for close to one-third of Massachusetts hospitals.” (DHCFP) • Continuing concerns about uncompensated care pool funding and adequacy of Medicaid payments
Massachusetts Medical Society Physician Practice Environment Index
110 105 100 95 90 85 80 75 70 102.2
100.4101.8101.1
99.3
100.0
101.4
100.9
98.3
96.3
94.5
92.5
91.2
88.2
91.8
90.5
85.6
85.3
82.2
MA US 84.3
80.8
79.9
79.2
76.3
75 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Physicians
• Medical malpractice premiums, high housing prices, and physician practice costs remain key concerns • Critical workforce shortages • Stress in many specialties • Most acute in neurosurgery, anesthesiology, radiology, cardiology, gastroenterology, orthopedics • Big problems in western part of the state, on the Cape and in many community hospitals statewide • Looming Medicare fee cuts
• • • • • •
Nursing Homes Financial stability compared to recent years
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Medicaid fee increases
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Increasing proportion of Medicare days (~15% of days; 30% of total revenue) 93% median bed occupancy rate
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Shortages in some services (MS, TBI) Closed 7 homes (1000 beds) Continuing improvement in labor situation
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CNA vacancy rate down
– –
15-20% nursing vacancy Administrator turnover and burnout Changing face of nursing homes
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Half of admissions < 30 days; ALOS ~8 months
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Hospice, rehabiliation Need for dramatically different physical plant
Home Health Care
• Discharges to home health care up • Staff shortages severe, particularly nursing • Operating costs are up – Nursing salaries, gasoline • Fee increases not keeping pace – Small increase in Medicare; little increase in Medicaid fees • New technologies showing promise of reducing hospital use – Telehealth monitoring • Some progress on supporting community-based long term care
Community Health Centers
• Growing number of practice sites – 54 organizations and 185 sites • Fragile but stable financial condition – Wide variation • Disturbing growth in number of patients without insurance – Erosion of employer coverage; undocumented • Some Medicaid rate relief – Concern that rates still below reasonable costs for Medicaid and uncompensated care pool • Unmet capital needs • How will CHCs fare in health reform?
– Resources for those who fall through cracks?
– Inclusion in any new insurance products?
Most Major Health Plans Have Had Consistently Profitable Results
Profit Margin: 2002-2005 (2Q)
6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% HPHC Tufts Fallon BCBS 2002 2003 2004 2005 (2Q)
Source: Division of Insurance
All Health Plans But BCBS Are Losing Members Blue Cross Blue Shield vs. Top 3 Competitors June 2004 vs. June 2005 +200,000 2,800,000 2,400,000 2,000,000 1,600,000 -114,000 1,200,000 800,000 -27,000 -78,000 400,000 0 HPHC Tufts 2Q 2005 707,000 652,000
Source: Massachusetts Division of Insurance.
` -9,000 Fallon 165,000 Combined 1,524,000 BCBS 2,800,000
Health Plan Net Worth as of June 30,2005 Blue Cross Blue Shield vs. Top 3 Competitors Dollars in millions: Statutory Basis $1,160 $1,200 $1,000 $800 $702 $600 $400 $200 $0 $254 $334 $114 HPHC Tufts Fallon Combined BCBS + HMO Blue
Source: Massachusetts Division of Insurance.
Health Plan Net Worth Per Member as of June 2005
(
Statutory Basis) $1,200 $1,000 $800 $690 $600 $400 $200 $0 $359 $512 $460 $414 HPHC Tufts Fallon Combined BCBS + HMO Blue
Source: Massachusetts Division of Insurance.
Medicare D Comes to Massachusetts
17 Contracts for Stand-Alone Drug Plans (44 products) Aetna Medicare BCBS of Massachusetts CIGNA Healthcare Coventry AdvantraRx.
Health Net Life Insurance Co Humana Insurance Company* Medco Health Solutions Memberhealth, Inc.
Pacificare Life And Health Insurance Co.
RxAmerica, LLC SilverScript Insurance Co.
Sterling Plus Rx Unicare United American Insurance Co.
United Healthcare Wellcare Health Plans 7 Medicare Advantage Plans (~36 products) BCBS of Mass.
Commonwealth Care Alliance Fallon Community Health Plan Harvard Pilgrim Health Care Senior Whole Health Tufts Health Plan United Healthcare
Growing Number of Uninsured, Even with Significant Increase in MassHealth 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 683,000 680,000 1995 857,000 921,000 996,000 928,000 941,000 MassHealth 1,021,000 496,000
CPS
460,000 Urban 418,000 365,000 1998 2000 2002 2003 2004 2005 Uninsured CPS MassHealth Urban Institute
Sources: “Health Insurance Status of Massachusetts Residents,” 1998, 2000, 2002, and 2004Massachusetts Division of Health Care Finance and Policy. “Massachusetts Residents Without Health Insurance, 1995,” Blendon, et al, Harvard School of Public Health..
Active health reform landscape…
• Blue Cross Blue Shield Foundation “Roadmap to Coverage” • Public Proposals -Romney, Travaglini, HCFA/ACT Coalition, Single payor • DiMasi/House proposal in the works – Bill next week?
• Possible Ballot Initiatives -- Constitutional Amendment, MassACT
How Does the MassHealth Waiver Affect Health Reform ?
• Negotiations continue with CMS to finalize terms • $770 million in question ($385 million of federal funding) • CMS letter recommends state proposal for Safety Net Care Pool (SNCP) by January 15, 2006 • Impact of tighter budget neutrality on expanding Medicaid eligibility?
Annual Premiums for Most Popular Individual Health Insurance Products $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 $6,276 $4,872 $4,764 $11,520 $14,376 $17,412 $18,852 Medex Gold Single 20s BCBS Family in 30s Couple in early 60s HPHC
Annual rate of increase 2004-2005= 10-17% Source: Division of Insurance. Rates are for residents of Boston; standard HMO product
2005 Annual Premiums for Individual Health Insurance as Percent of 2004 Median Family Income in Massachusetts 40% 35% 30% 25% 20% 15% 10% 5% 0% 17% 21% 25% 27% BCBS HPHC Family in 30s Couple in 60s
Source: Division of Insurance and US Census Bureau. Median income =$68,700
The Quality Landscape Is Crowded and Quite Uncoordinated • Alliance for Health Care Improvement • EOHHS Cost and Quality website • GIC/Mercer project • Mass e-Health Collaborative • Mass Coalition for Prevention of Medical Errors • Mass Health Data Consortium • Mass. Health Quality Partners • MassPro • AHRQ • Bridges to Excellence • IHI 100K Lives • JCAHO • Leapfrog • National Quality Forum • NCQA/HEDIS