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Katie Holahan

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Two Bills Advance Efforts to Address Skills Shortage

Posted by Katie Holahan on Aug 14, 2017 7:30:00 AM

AIM’s Blueprint for the Next Century long-term economic plan for Massachusetts identifies the shortage of qualified workers as the central impediment to the future of the Bay State economy. Worker shortage cross almost every industry, from manufacturers in the Pioneer Valley to software companies in Boston’s Innovation District to research and engineering firms on the North Shore.

ManufacturingWorkerSmall.jpgThe 4,000 member employers of AIM believe there are three key steps to addressing the problem:

  1. Identify opportunities to restructure state work-force training programs to anticipate both near and long-term work-force growth;
  2. Diversify the types of relevant training and education available to students statewide; and,
  3. Allow the public education system the flexibility and adaptability to respond to the needs of the local and regional work force, so graduates enjoy greater economic opportunity.

Two bills recently released from the Legislature’s Joint Committee on Labor and Workforce Development will help Massachusetts achieve the first goal.

The bills, Senate 2109 and House 3804, filed by the late Senator Ken Donnelly and Representative Kenneth Gordon, respectively, would allow a transfer of up to $1.1 million, or 5 percent, of funds from the Workforce Training Fund to the Workforce Competitiveness Trust Fund (WCTF) to be used for sector-based job training for non-incumbent workers. The Workforce Training Fund generates revenues via employer assessments, and is normally used to improve the skills of workers who are already on the job.

AIM advocated successfully for a pay-for-performance funding structure in the proposed grant program. Half of the grant funds in the program will be tied to job placement and retention outcomes. The money won’t be released until workers are trained and in their new, full-time jobs for two months. Such discipline and measurement will allow the state to connect the available workforce with employers so that all regions and industries have similar opportunities for success.

Training both incumbent workers and new workers will create the type of flexibility needed to respond to a changing economy while meeting clear job growth objectives.  As the commonwealth works to modernize and streamline its work-force development system, AIM will continue to advocate for such requirements in any similar pieces of workforce legislation.

The creation of a job and a person’s ability to do that job weave together every important aspect of social and economic stability: the desire for a better life; the ability to support a family; the confidence to start a business; and the need to support efficient government management of services like education, health care, and public safety.

Governor to Sign Employer Assessment

Posted by Katie Holahan on Aug 2, 2017 7:43:35 AM

Governor Charlie Baker said last night that he intends to sign legislation imposing a $200 million MassHealth assessment on employers. The governor also reaffirmed his commiment to work with lawmakers to make long-term structural reforms to the state’s health-insurance program for low-income people.

“While this is certainly not the outcome we hoped for, we recognize that the governor’s decision is carefully considered and designed to achieve the ultimate, long-term goal of substantive MassHealth reform,” said Rick Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“We are encouraged by the repeated statements of commitment by both Senate and House leadership that reform of the MassHealth system is as high a priority for them as it is for the employer community.

“In 2006, employers joined with doctors, hospitals, patient advocates, and lawmakers to forge a health-reform law that required everyone to share the responsibility for improving access to health care. Right now, employers are faced with a policy levying a new tax on businesses without any corresponding cost-efficiencies implemented in the public health-care system. We anticipate a continued dialogue as we work to affect meaningful, sustainable, long-term MassHealth reform.

“We are willing – in fact, we must – join together once again with a renewed focus to ensure the commitments of the employer community are not made in vain,” Lord said.

Topics: Massachusetts state budget, Health Care Costs, Employer Health Assessment

Legislature Levies Medicaid Assessment Minus Reforms

Posted by Katie Holahan on Jul 26, 2017 4:53:35 PM

The Massachusetts Legislature today levied a $200 million tax on employers to cover a shortfall in the MassHealth program without making long-term structural changes needed to solve the problem.

StateHouse-resized-600.pngThe House of Representatives and Senate took the action despite pleas yesterday from the Baker Administration and the business community to consider the assessment and the long-term reforms as a package. AIM believes the financial problems at MassHealth, which provides health insurance to 1.9 million residents, will become more severe without significant reforms.

The assessment would increase the Employer Medical Assistance Contribution (EMAC) and fall most heavily on companies where employees use MassHealth instead of an employer health plan. The assessment would be partially offset by a two-year Unemployment Insurance rate adjustment that would save employers $335 million over two years versus current rates.

“The 4,000 employer members of Associated Industries of Massachusetts (AIM) are deeply disappointed that the Legislature has again decided to impose an assessment on employers without reforming the MassHealth program and reining in the crippling cost of health insurance,” said John Regan, Executive Vice President of Government Affairs at AIM.

“We note that the Legislature has pledged to pursue MassHealth reforms at a later date. We look forward to working with them on those reforms.”

The Legislature initially passed the reform-free assessment on July 7 as part of the budget for Fiscal Year 2018. Governor Charlie Baker returned that section of the budget to the Legislature 10 days later and asked lawmakers to pass the full package of reforms designed to place MassHealth on a firm financial footing.

The proposed reforms include:

  • Restructuring MassHealth coverage for non-disabled adults to look like commercial insurance coverage;
  • Moving 140,000 people with incomes more than the federal poverty level out of MassHealth and into ConnectorCare;
  • Shifting 230,000 MassHealth members from standard MassHealth coverage, which includes coverage for long-term care, into CarePlus, which does not;
  • Requiring the commonwealth to petition the federal government to re-establish the prohibition against employees who are offered employer-sponsored insurance from seeking coverage through MassHealth.

It is uncertain whether the governor will sign the newest version of the assessment.

“Employers are thus left not only to struggle with the rising cost of providing health insurance to their own employees, but to bail out an unsustainable public insurance program as well,” Regan said.

Topics: Massachusetts Legislature, Health Insurance, Employer Health Assessment

Governor Sends Back Employer Assessment; Seeks MassHealth Reforms

Posted by Katie Holahan on Jul 17, 2017 3:38:18 PM

Governor Charles D. Baker returned to the Legislature today the employer health-care assessment portion of the Fiscal Year 2018 budget, along with provisions changing Unemployment Insurance rates for 2018 and 2019, and urged legislators to include long-term reforms that will put the MassHealth program on a firm financial footing.

Health.Energy.jpgThe governor is also filing separate legislation making reforms to the commercial health-insurance market.

“The governor’s actions provide the Legislature with the opportunity to review and vet the reforms, and to pass a thoughtful, comprehensive package that balances investments made by all stakeholders in the Massachusetts healthcare system,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

The employer assessment would raise $200 million annually through the Employer Medical Assistance Contribution (EMAC) and fall most heavily on companies where employees use MassHealth instead of an employer health plan. The assessment would be offset by a two-year Unemployment Insurance rate adjustment that would save employers $335 million over two years versus current rates.

The administration hammered out the MassHealth reforms during months of negotiations with AIM and other members of the business community. The proposed reforms include:

  • Restructuring MassHealth coverage for non-disabled adults to look like commercial insurance coverage;
  • Moving 140,000 people with income above 100% of the federal poverty level out of MassHealth and into ConnectorCare;
  • Shifting 230,000 MassHealth members from standard MassHealth coverage, which includes coverage for long-term care, into CarePlus, which does not;
  • Requiring the commonwealth to petition the federal government to re-establish the prohibition against employees who are offered employer-sponsored insurance from seeking coverage through MassHealth.

The Baker Administration’s decision to file stand-alone legislation addressing commercial health insurance reforms acknowledges the need for comprehensive reform of our private healthcare systems. As employers are faced with the second most expensive health-care costs in the nation, the need for reform and cost containment is vital to maintain both the quality of care and the level of coverage across our commonwealth.

AIM looks forward to the Legislature’s consideration of these challenging topics and their willingness to engage with a broad coalition of partners across our health-care system to attain an equitable resolution.

Topics: Massachusetts state budget, Controlling Health Care Costs, Employer Health Assessment

Beacon Hill Passes Health Assessment Without Reforms

Posted by Katie Holahan on Jul 7, 2017 12:10:00 PM

The Massachusetts Legislature today passed a Fiscal Year 2018 budget that requires employers to cover a financial shortfall in the MassHealth program, but does not make the long-term structural changes needed to solve the problem.

statehousedome1.jpg“The 4,000 employer members of Associated Industries of Massachusetts (AIM) are deeply disappointed that Massachusetts has refused to take the courageous steps necessary to reform the MassHealth program and to rein in the crippling cost of health insurance,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“The proposed state budget would force employers already struggling with the rising cost of providing health insurance to their employees to also pick up the tab for bailing out the unsustainable MassHealth program.”

The budget turns away from key elements of a compromise forged by the business community and the Baker Administration that balanced restructuring of MassHealth and the private insurance market with a temporary, $200 million assessment on employers. The compromise was designed to address the structural cost imbalances in MassHealth and place the program on a sound financial footing.

The business community has instead been left with a reform-free plan that will create a new tax on employers without making any hard decisions on containing costs.

The assessment would increase the Employer Medical Assistance Contribution (EMAC) and fall most heavily on companies where employees use MassHealth instead of an employer health plan. The assessment would be partially offset by a two-year Unemployment Insurance rate adjustment that would save employers $335 million over two years versus current rates.

“On its own, the employer assessment negatively impacts thousands of businesses around the state.  That impact is only acceptable as one part of a broader package that begins to address underlying health care costs,” AIM and a coalition of employer groups said in a statement.

“Eleven years ago, employers joined with doctors, hospitals, patient advocates and lawmakers to forge a health-reform law that required all parties to share the responsibility for improving access to health care. The employer community calls for that same sense of shared responsibility now to solve the MassHealth shortfall,” Lord said.

Business Groups | Lack of Reform Unacceptable

Topics: Budget, Employer Health Assessment

Governor, Business Community Reach Compromise on Health Assessment

Posted by Katie Holahan on Jun 20, 2017 2:00:00 PM

The Massachusetts business community has agreed to support a broad compromise plan to stabilize the Massachusetts Medicaid and Unemployment Insurance systems while offseting a two-year employer health-care assessment with savings elsewhere.

Baker.2017.jpgThe complex agreement, developed after months of intensive negotiations between the Baker Administration and the business community, would make structural changes to the MassHealth program to reduce ongoing financial shortfalls in the state/federal insurance program for low-income people. There would also be cost-saving changes to the commercial health-insurance markets, including increased incentives for patients to seek care at high-quality community hospitals.

The plan would use a temporary employer health assessment as “bridge financing” to capitalize the MassHealth program until the long-term reforms are implemented. The assessment would raise $200 million annually through the Employer Medical Assistance Contribution (EMAC) and fall most heavily on companies where employees use MassHealth instead of an employer health plan.

The assessment would be offset by a two-year Unemployment Insurance rate adjustment that would save employers $335 million over two years versus current rates.

The administration announced the agreement today in a letter to the chairs of the Legislature’s Joint Committee on Ways and Means.

“The comprehensive plan moderates the employer assessment that was originally proposed in January while offering the opportunity for meaningful structural reforms to the health insurance system and rate relief within the Unemployment Insurance system,” said Richard C. Lord, President and Chief Executive Officer of AIM.

The compromise will require approvals both from the Massachusetts Legislature and from federal officials.

Here are the key elements of the agreement:

MassHealth/Medicaid

  • Moves 140,000 people who are above the federal poverty level out of Masshealth and into the Connector market;
  • Restructures MassHealth coverage for non-disabled adults to look like commercial insurance coverage;
  • Shifts 30,000 MassHealth members from standard MassHealth coverage, which includes coverage for long-term care, into Careplus, which does not;
  • Adds co-pays for MassHealth members;
  • Requires the commonwealth to petition the federal government to re-establish the prohibition against employees who are offered affordable health insurance by an employer from seeking coverage through MassHealth.

Commercial Market Reforms

  • Imposes a five-year moratorium on insurance mandates (requires change to state law);
  • Increases the required premium differential for tiered network plans from the current 14 percent to 28 percent. (requires state law change);
  • Promotes transparency tools for employers and consumers. (requires state law change);
  • Increases access to lower-cost providers by expanding the scope of practice for optometrists, podiatrists and advanced practice registered nurses (APRN) and creating a new mid-level provider - dental therapists. (requires state law change).

Employer Assessment:

  • Applies to employers with six or more employees (both full and part-time);
  • Increases the EMAC contribution rate for all employees, statewide. Additional annual two-tiered assessment on any employees receiving health insurance through public programs.
  • Tier 1 is broad based, raising the current EMAC rate from 0.34 percent to 0.51 percent of annual wages, up to the annual wage cap of $15,000. Applies to all employers currently subject to EMAC; raises the maximum per-employee contribution rate from $51 to $77; state expects to annually collect $75M under this tier;
  • Tier 2 introduces a targeted payment that would require employers to pay an additional 5 percent of annual wages for each non-disabled employee on public coverage, up to the annual wage cap of $15,000; applies to all employers currently subject to EMAC with non-disabled employees on MassHealth (not in premium assistance) or subsidized Connector coverage (ConnectorCare); Tier 2 would result in an annual maximum per employee contribution rate of $750; state expect to collect an estimated $125M in Fiscal Year 2018 under this tier; the estimate is dependent upon the actual number of individuals on public coverage.
  • Waiver applies for anyone receiving insurance through parent, spouse or other household member;
  • Implementation date of January 1, 2018 and a sunset date two years later.

Unemployment Insurance

  • An automatic increase of three levels to schedule F due to take effect on January 1 would be replaced with a one-level jump to schedule D for 2018 and another single increase to schedule E for 2019.

Governor Baker in January proposed to close a $600 million shortfall in MassHealth by levying a $2,000-per-employee fee upon companies at which at least 80 percent of full-time worker equivalents do not take the company’s offer of health insurance, or do not make a minimum contribution of $4,950 annual contribution for each full-time worker. AIM opposed that plan because it would penalize the majority of companies that provide good health insurance to their workers.

Topics: Controlling Health Care Costs, Charlie Baker, Employer Health Assessment

Senate Creates Roadmap for Debate on Employer Assessment

Posted by Katie Holahan on May 16, 2017 3:36:24 PM

The Massachusetts Senate today sought to define the process through which the Baker Administration might require employers pay for a shortfall in the MassHealth program.

statehousedome.jpgThe proposed Fiscal Year 2018 budget released by the Senate Ways & Means Committee gives the administration a choice of increasing the Employer Medical Assistance Contribution (EMAC) or creating a stand-alone quarterly assessment on employers.

The Senate envisions raising $180 million from such assessments versus the $300 million contained in the governor’s budget. Senators would also limit the life of those assessments to two years.

The approach of creating a roadmap for the administration is similar to the one adopted earlier by the House of Representatives, through the specifics of each proposal differ.

“The Senate Ways & Means Committee took a step in the right direction today by outlining a thoughtful and transparent approach to closing the Medicaid budget deficit. Employers are particularly encouraged that the committee’s budget proposal would raise $180 million from employers instead of $300 million; would provide the Baker Administration with the flexibility to find a solution; and would sunset any employer assessments,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“The Senate plan again reminds us that the only long-term solution to the Medicaid funding issue is to redouble efforts to control the cost of providing health insurance to our low-income neighbors. Without such an effort, the Medicaid budget gap will continue to grow and divert precious resources from other priorities such as education and infrastructure.”

Lord also urged the Senate to add a provision that would require the Baker Administration to seek a federal waiver allowing Massachusetts to prevent people who receive an offer of health insurance from their employers from purchasing insurance through MassHealth.

The Senate proposal would require Secretary of Administration and Finance Kristen Lepore to file a letter with the Legislature by August 1 indicating whether she will choose the EMAC or assessment option. Regulations must be published by November 1 and take effect January 1 of next year.

Secretary Lepore could either increase the employer assessment for EMAC, an obscure program originally meant to provide health insurance to unemployed people, from .34 percent to .75 percent, or establish a separate employer assessment based upon whether or not an employer offers qualified health insurance and has a minimum uptake rate for that insurance.

The secretary would have  to consider the following in developing any assessment:

  1. how much the employer pays toward the employee’s insurance;
  2. how many employees they have;
  3. whether or not their employees are Massachusetts residents;
  4. how many employees are part-time
  5. whether or not their employees have access to health insurance through different private sources, like parental, spousal, veteran’s, or Medicare, for example.

Governor Baker originally proposed a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents do not take the company’s offer of health insurance, and that do not make a minimum contribution of $4,950 annual contribution for each full-time worker. If 70 percent of a company’s employees accept company health insurance, the company would be assessed $2,000 per employee for the number of employees represented by the 10 percent difference.

AIM has opposed the employer assessment because the growing shortfall at MassHealth, which provides health insurance to 1.9 million low-income Massachusetts residents, is attributable largely to problems arising from the federal health care reform. Federal reform made access to health insurance an entitlement based on expanded income eligibility and significantly expanded the roles of people on Medicaid.

The full Senate will vote on the Medicaid assessment proposal and the rest of its Fiscal Year 2018 budget blueprint later this week. House and Senate will then meet to work out differences.

 

Topics: Massachusetts senate, Health Care Costs, Employer Health Assessment

House Establishes Process to Study Health Assessment

Posted by Katie Holahan on Apr 10, 2017 1:08:24 PM

The Massachusetts House Ways and Means Committee wants the Baker Administration to examine the assumptions underlying its controversial proposal to have employers pay for a shortfall in the MassHealth program.

StateHouse-resized-600.pngThe proposed Fiscal Year 2018 budget released by the committee today would create a six-month review of the $2,000-per-employee “Fair Share Assessment” that the administration included in its own budget proposal in January.

The House plan would require the administration to conduct public hearings and determine the potential effect of the assessment on small business. It would also limit the definition of a full-time employee in any assessment by excluding temporary and seasonal employees.

Perhaps most importantly, the House envisions that any assessment would generate $180 million instead of the $300 million initially projected by the administration. MassHealth is the commonwealth’s Medicaid health-insurance program for low-income people.

“The issues surrounding the MassHealth deficit and the proposed employer assessment are extraordinary complex. We believe the House proposal lays out a prudent process for reviewing the issue in a manner that will allow AIM to continue its ongoing discussions with lawmakers and the administration,” said Richard C. Lord, President and Chief Executive Officer of AIM.

The administration’s plan would impose a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents do not take the company’s offer of health insurance, and that do not make a minimum contribution of $4,950 annual contribution for each full-time worker. If 70 percent of a company’s employees accept company health insurance, the company would be assessed $2,000 per employee for the number of employees represented by the 10 percent difference.

The employer assessment represents an expansion of the so-called fair share contribution plan that was a linchpin of the 2006 universal health care law in Massachusetts before it was repealed to make way for the federal Affordable Care Act (ACA). 

The House Ways and Means budget will require the administration to consider the following factors in developing any sort of health-care assessment on businesses in Massachusetts.

  • What a reasonable utilization (uptake) rate might be by reviewing other entities, such as the Group Insurance Commission;
  • Whether employees receive premium assistance through MassHealth;
  • Whether employees receive primary MassHealth benefits;
  • Whether employees receive insurance from other, non-MassHealth sources (spousal; parental; veterans);
  • Whether employees are residents of the commonwealth (and thus eligible for MassHealth);
  • What average Massachusetts employer contribution rates might be.

The review of the proposed assessment would involve multiple state agencies, including the Executive Office of Health and Human Services, the Department of Revenue (DOR), the Health Connector, the Division of Unemployment Assistance, the Center for Health Information and Analysis, and MassHealth.

A public hearing on proposed regulations must be held by the first week in October 2017.

The administration would be required to implement all regulations relative to an assessment by November 1. Full implementation of any resulting policy would occur on January 1, 2018. A small-business impact statement must be filed.

AIM has opposed the employer assessment because the growing shortfall at MassHealth, which provides health insurance to 1.9 million low-income Massachusetts residents, is attributable largely to problems arising from the ACA. Federal reform made access to health insurance an entitlement based on expanded income eligibility and significantly expanded the roles of people on Medicaid.

The House budget would require the administration to seek an ACA waiver that would allow the original prohibition to be reinstated.

Topics: Budget, Health Care Costs, Massachusetts House of Representatives

Survey: Employers Use Wages, Partnerships to Address Skills Crisis

Posted by Katie Holahan on Apr 5, 2017 1:30:00 PM

Massachusetts employers believe that the best way to address the shortage of skilled workers is to show those workers the money, according to a new AIM survey.

ManufacturingWorkerSmall.jpgAsked what strategies their companies have adopted to address the persistent skills gap that affects many industries, 47 percent of employers responded that they have increased wages and benefits. Forty percent say they use temporary-to-permanent employment agencies to find workers, and another 39 percent indicate that they have established a relationship with their local high school or vocational school.

The results were based on responses from 100 employers representing a cross-section of the state economy. Employers could check multiple answers.

Indeed, many employers seem to be using multiple strategies to find the employees they need. Approximately 25 percent of companies say they have established a relationship with a community college, recruited employees from outside the area, used state Workforce Training Fund Grants to improve the skills of existing workers, and established on-the job training.

“We do whatever works, but it is a growing, long-term problem,” said one employer who participated in the survey.

AIM’s Blueprint for the Next Century long-term economic plan for Massachusetts cites hiring and retaining skilled workers at the predominant challenge to the economic prosperity of Massachusetts. The Blueprint calls for Massachusetts to create a flexible and responsive statewide work-force development system that provides residents the opportunity to learn the skills that employers in each region demand.

Katie Holahan, Vice President of Government Affairs at AIM, finds it encouraging that a significant share of employers is forging ties with vocational schools, community colleges and other educational institutions.

“These collaborations allow employers to provide schools and colleges with a clear idea of the skills that are in demand and for the schools to teach those skills to students. It creates a talent pipeline that represents the only long-term solution to the shortage of skilled employees,” Holahan said.

AIM has also supported efforts by the Manufacturing Advancement Center Workforce Innovation Collaborative (MACWIC) to develop with vocational schools a competency-based curriculum for precision machining that allows students to meet prescribed industry standards.

The emphasis on raising wages and benefits appears at odds with other recent surveys showing that tight labor markets have yet to exert significant upward pressure on average wages.

Massachusetts employers responding to the 2017 AIM HR Practices Survey projected smaller average wage increases in 2017 than in 2016. Wage and salary increase budgets for this year were projected at 2.75 percent, down from 2.,9 percent in 2016 and lower than the predicted 3.0 percent budget increases predicted nationwide. 

If you are interested in keeping up with work force development area, please email Katie Holahan at KEH@aimnet.org

Topics: Education, Workforce Training

State Tightens Standard for Health Cost Growth

Posted by Katie Holahan on Mar 29, 2017 1:21:55 PM

The Massachusetts Health Policy Commission voted unanimously today to lower the state’s objective for the growth of health-care expenditures from 3.6 percent to 3.1 percent beginning in 2018.

HPC.jpgThe vote marks a significant milestone for employers and consumers struggling with the soaring cost of health insurance. AIM President and Chief Executive Officer Richard C. Lord, who represents employers on the Health Policy Commission, has been a vocal supporter of lowering the benchmark and voted in favor of the 3.1 percent level.

“Today’s vote represents a concrete, measurable step toward moderating the type of premium increases that give employers a knot in their stomachs when they look at their insurance renewals,” Lord said.

“The action will ultimately mean more than all the sound and fury over national health reform in Washington."

The spending growth benchmark, established as part of the health-cost control law of 2012, is a critical component for understanding year-over-year increases in health-care spending. AIM has always favored an aggressive goal – the organization joined with the Greater Boston Interfaith Organization in 2012 to support setting the health-care cost growth benchmark at two percentage points below the growth in the state’s economy.

The association ultimately supported the establishment of a 3.6 percent benchmark because it recognized the vital importance of creating a standard to measure cost-containment efforts.

But Massachusetts has not yet seen sufficient progress. The commonwealth has exceeded the 3.6 percent benchmark in two of the past three measurement periods. Total Health Care Expenditures (THCE) grew by 4.2 percent from 2013 to 2014, and by 4.1 percent from 2014 to 2015.

“These unsustainable cost increases are occurring in an industry where experts agree that at least a third of all care is unnecessary – delivered in the wrong setting; marked by a lack of coordination; provided with an inadequate emphasis on prevention; harmed by medical errors; burdened with rules and fraud; or just plain excessive,” Lord said.

AIM is also addressing the health cost issue by supporting new research conducted by the Health Policy Commission suggesting that Massachusetts could reduce total health-care expenditures anywhere from $279 million per year to $794 million per year, or 0.5 to 1.3 percent, by making seven improvements to the health-care system.

The improvements:

  • Shift community appropriate care to community hospitals – Reduce by 5-10 percent the number of cases treated at teaching hospitals that would be more appropriately treated at community hospitals. Savings: $43 million to $86 million.
  • Reduce hospital readmissions – Cut the 2015 hospital readmission rate from 15.8 percent (78,000 readmissions) to a range of 15 to 13 percent. Savings: $61 million to $245 million.
  • Reduce avoidable emergency room visits – More than 900,000 emergency room visits during 2015 were considered avoidable. Shift 5-10 percent of those avoidable visits to lower-cost settings. Savings: $12 million to $24 million.
  • Reduce use of institutional post-acute care – Redirect 5-21 percent of the patients who currently leave hospitals to go to institutional rehabilitation facilities into home care. Savings: $46.6 million to $186 million.
  • Provide incentives for consumers to choose high-value primary care providers.
  • Increase the use of alternative payment methods -The commonwealth wants to increase the percentage of HMO participants covered by alternative payment methods from 58.5 percent in 2015 to 80 percent this year. Savings: $23 million to $68 million.
  • Reduce the growth of prescription-drug spending – Cut the growth-rate of spending on prescriptions from 5.0 percent in 2016 to 3.6 percent to 4.3 percent. Savings: $57 million to $113 million.

Topics: Health Care Costs, Health Insurance, Health Care

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