Analysis of the Advisory Committee on Consolidated Health Care Financing

The Advisory Committee on Consolidated Health Care Financing, commissioned by the Managed Care Act of 2000, released its report in December 2002. The year-and-a-half process leading to the report (final report available) offers valuable insight into the health care reform prospects for the Commonwealth and important lessons for the future of reform.

• A stakeholder process is feasible. The committee was broadly constituted, including representatives of all the major sectors-consumers, providers, institutions, the insurance industry, large and small businesses. Attendance was inconsistent, and participation was variable. The advocates were well represented and vocal. Most others were quiet, but what was not said spoke volumes. Specifically, the insurance industry was unwilling to creatively consider how to become less of a financial drain on the system. They did little if anything to help the consultants devise new and creative ways to streamline the administration of health care.
  
  
• The dollars are huge. Perhaps the most useful part of the report is the total estimate of the health care costs for the Commonwealth. The consultants were broadly inclusive, including for example, the work compensation system and personal costs for both the insured and uninsured. The total figure was $41.475 billion.
  
  
• The costs of health care administration are outrageous. The consultants estimated that 39% of each health care dollar goes to administrative costs. The costs break down as follows: 11% hospital administrative costs, 5% physician administrative costs, 7% others, and 16% insurance company administrative costs. Anyone looking to make the system more effective can see where the resources are.
  
  
• The profession community is not well represented. Perhaps the diversity of providers is too broad to expect anything better but if Mass Medical Society is an example, then the physicians should demand much more. The contribution of MMS was driven by a very conservative policy stance, namely that any sort of consolidation would empower the state too much. This begs the issue that Medicare, the quintessential "state" program, enormously stabilizes the health care "market" through a fixed and reliable system of reimbursement. Furthermore, the need for professionals to collaborate with one another to be sure the system works for the good of the patients and that professionals are adequately and appropriately supported in their work was never broached by the official representatives. The protection of self-interests seemed to be shared by many.
  
  
• Reform cannot begin without political support. There was to have been a meeting of the committee to make recommendations to the legislature, but this critical summative step was never taken. The legislative co chairs were not interested or willing to make a more public and potentially politically risky move. There were no "legs" to this process and it withered in the swirl of budgetary crisis and leadership transition. Even recognition that some sort of state based stakeholder planning process would be useful to consider was never articulated. The net result has been months of wrangling and manipulating of the health care system and the further sense of disenfranchisement among the providers. There are more of my colleagues now than before who are disgusted with the waste they swim in every day, ranging from ridiculous prior approvals to mountains of unnecessary documentation.

Regrettably, the report had little impact. Its release was acknowledged by an article in the business section of the Boston Globe and by an anti-single-payer editorial in the Herald, though it was not a single-payer document.

Our role as advocates for change is essential. We must continue our demand for the stakeholders, meaning the communities, families, individuals we care for, the institutions and agencies that deliver care, and the businesses and governments who pay for care, to work creatively and consistently to make the health care system equitable, efficient, and universally available. The insurance industry can be a useful resource only if it consistently serves the public good and does not serve for personal or investor profit. There is as much need as ever to confront the health care system with its failures.

John D. Goodson M. D.
Board Member, Alliance to Defend Health Care