Baker outlines his take on health care costs

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BOSTON, OCT. 5, 2015…..Laying out their visions of the health care marketplace, Gov. Charlie Baker, a former health insurance executive, and a visiting health policy expert and economist offered sometimes varying perspectives at the annual health care costs trends hearing.

Suggesting that the “culture” of a hospital, such as Lowell General Hospital, might have more to do with its decades-long run of high quality and low cost than other systemic changes, Baker said he would be “aggressive” about adding transparency to the market.

While extolling the importance of competition, Harvard Kennedy School professor Amitabh Chandra included price transparency with management of population health, and wellness programs as ideas that should elicit skepticism

“We have to be extremely skeptical of all the something-for-nothing remedies,” Chandra told the Health Policy Commission Monday after Baker gave testimony at annual hearings that will continue on Tuesday. “So we have to be extremely skeptical about the benefits of consumer price transparency, of wellness, population health, in saving money in the next five, 10 years.”

Both Baker and Chandra spoke at length to help launch the hearings where policymakers and industry officials discussed drivers behind 2014’s 4.8 percent growth in health costs, outpacing a 3.6 percent benchmark

Baker, who steered Harvard Pilgrim Health Care away from financial ruin after serving in state government, said his belief that prescribers had not been suitably careful about narcotics made him question other prescription practices.

“Since 80 percent of the people who end up addicted to heroin started on prescription pain meds, and the number of prescriptions that have been written for opioids have gone up five-fold over the course of the past 15 years,” Baker began, continuing, “My own view is my colleagues in the health care world have been not as aggressive about understanding the downsides associated with many of these medications as they’ve been about understanding and appreciating the upside.”

Baker said the state should figure out how to better support family caregivers, and highlighted Lowell General Hospital as an institution that has had high quality and low costs since Baker’s time in the Weld administration.

The governor credited the “culture and the approach” of the Lowell hospital more than the various payment models, and he said its success is worth studying.

“I’ve always been a big believer that if you find somebody who’s doing something well, the best thing you can do is figure out what it is they’re doing and then celebrating it,” Baker told reporters.

Baker noted the important role biotech and other health care companies play in the local economy, while Chandra said, “Health care is not a jobs program.”

“We specialize in high quality care and innovation, and economic expansion in those areas means more jobs and more resources pumped into our local economy,” Speaker Robert DeLeo said in a speech after Chandra. “I think that’s in direct contravention to what the gentleman who spoke before me just said, but whatever. The one thing I did catch.”

Senate President Stanley Rosenberg had planned to speak to the commission Monday, but was unable to make it, and will speak to the group Tuesday.

Energy and housing costs tend to come up in his conversations with others more often than health care costs, Baker said Monday. Baker said Medicare’s fee-for-service undergirds how people in the health market view the dollar-value of procedures, even as groups move toward more holistic approaches to compensating health care providers, such as accountable care organizations.

“If you talk to almost anybody in the provider community, however it is they get paid by anybody, they usually convert whatever that is into what they call a Medicare fee-for-service equivalent, and that’s pretty much the way people keep score,” Baker told reporters later in the day. He said, “Medicare has historically paid more for technology and for procedures more than it’s paid for time, which is what primary care’s sort of always been about.”

In general, accountable care organizations accept a lump sum payment to manage the health needs of a population of insured individuals.

While he cast skepticism at global payments as a means of raising quality and lowering cost, saying it is built on a “fee-for-service chassis,” Chandra raised the idea of paying a provider per health episode.

“This will take us a very, very long time to get right,” Chandra said of new payment models.

Chandra said health costs track with gross domestic product, which is on the rise, and contemplated using a tiered system – currently used by insurers to classify providers – for procedures, so that expensive, potentially useless procedures would not receive the same coverage.

Chandra described the costs associated with proton beam therapy for prostate cancer as “the Death Star of all medical technologies, because nothing so big and perhaps so useless has ever been invented before.”

Copyright 2015 State House News Service

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