Remarks by Mario Motta, MD

Joint Committee on Health Care Finance

October 8, 2009

Good afternoon.

My name is Mario Motta. I am president of the Massachusetts Medical Society, and a cardiologist practicing at North Shore medical Center, in Salem. Thank you for the privilege of speaking with you today about the future of our Massachusetts health care system.

We’re here today because the cost of health care has become unaffordable, and rate of growth is unsustainable. Physicians in MA clearly understand that this must addressed decisively, because if it isn’t, the long term stability of health care will be in serious jeopardy.

We are doing something innovative here in Massachusetts – we are trying to go where everyone else has stumbled. Our goal is to bend the curve of rising health care costs, without sacrificing what’s good in our health care system.

For example:

• We have had extraordinary success in expanding access to health care coverage, with now 97.4% of all MA citizens having health Insurance, we are the envy of the other states. We must not surrender those gains.
• We have been leaders in academic medicine for generations. We must not let that be sacrificed to any health care reform.
• We are a center for medical innovation, and a job creation engine for our Commonwealth. This cannot be taken for granted, and we must protect it.
• And, Massachusetts is still a place where students want to come to learn to be doctors and start their careers here. We must protect what makes this a destination state for these young future doctors either.

The physicians of the MA medical society are involved in this effort because we share the belief that coordinated care is better than fragmented care.

We want to support innovations that move us in that direction. It’s better for the patient, and it’s better for our health care system.

That’s why we believe that studying new ways to pay physicians and hospitals is worth pursuing. But it has to be approached carefully, and deliberately.

While there are pockets of innovation around us, the kind of transformation envisioned here has never been done anywhere in this country on a system-wide basis. For that reason, there are many unknowns and unanticipated and unpredictable effects that could happen when you try to expand its scope and application.

For that reason, we are strong – very strong – advocates for establishing pilot projects for these innovations. They don’t have to take very long - they can’t. But we need to test many approaches to this issue on a limited controlled scale. We need to uncover the unintended consequences, learn from mistakes, and adjust to them, before it’s rolled out to larger sectors of our population and have a disaster unfold on health care delivery in this state.

What models work best in Massachusetts? Will they save money? If so, how much? What’s impact on quality? Or access? Will patients trust it? And, will many physician practices that currently are on thin ice financially survive the new models? We don’t know the answers to these questions. Pilots would help.

Further, very few physicians could today make a successful transition to a new payment model. And I frankly believe that five years probably won’t be enough time to get the job done. There’s too much diversity in our health care system to impose a simple model on everyone.

The needs,  dynamics of practices, and resources of practices based in urban Boston are very much different than say Berkshire county or Cape Cod. Imposing a single model on all 3 of these diverse regions is unlikely to achieve the same result in all 3 regions, to make that a baseline assumption will be a mistake.

We understand the urgency of the cost issue, but if we move too fast, many physicians won’t be able to keep their practices open, and shortages that we experiencing in many specialties – including primary care – will only get worse.

We have already have had some physicians state they are watching this very closely and making plans on leaving the state if their worst fears materialize. As I said, some of these practices are struggling to stay afloat now.

A new payment system cannot be rolled out statewide until we know the answers to these and many other questions.

Finally, we cannot focus on payment reform as the only answer to our state’s health care problems. Even if it could be implemented successfully and expediently – a big if – focusing on the small fraction of the health care dollar that is spent on physician services is not going to get the job done.

Indeed this year alone, BC/BS has declared a 10% increase in premiums for citizens in MA, and of that… 0% increase is what physicians are slated to receive from this very large rate increase. Physician fees are only about 20% of the health care pie: If every physician in the state worked for free for the rest of their lives, the state would get only about a 1-2 year reprieve in relentless insurance rate increases. Squeezing fees too hard may get you very little in return.

There are other factors we need to address:

• Patient education:    Pt expectations, compliance issues need to be understood and addressed.
• Wellness and prevention incentives: a healthy lifestyle and proper preventative care can lead to some savings and certainly a better quality of life.
• Defensive medicine:    Many studies have shown this to be a significant driver of costs, from our own survey of about 1000 physicians, to the independent Price-Waterhouse study, show that is a potential 1.5-3 billion dollar savings in this state, and 250 billion nationwide.  I point out very real proven success in Michigan, whose apology approach we wish to emulate here in MA.
• ­Administrative waste: The insurers in this state claim overhead of 11-15%, nationally it is claimed to be really 25%, the truth is somewhere in between those numbers. There are many administrative simplifications that could slash that figure for substantial savings.
• ­The over concentration of our health insurance industry:    We have 4 major insurers in the state, one is very dominant. They have antitrust exemption by law, yet physicians are specifically prohibited by antitrust laws to negotiate. Therefore while some large health care systems can bargain forcefully and have grabbed newspaper headlines, for the average small practice, this is not a level playing field. The contracts are typically take it or leave it, and with one insurer dominating over 50% of the market saying no to the contract means closing the practice. This is one of the major reasons we at the MMS do support a public option by congress to keep in check the power of these insurers.
• ­Mandates:   There are several bills before the legislature this year that would add even more insurance mandates. They are pushed by special interests and legislators who want to genuinely help a special constituency. However, many of these are not based true evidenced based science, and all would drive up premiums even more then the amount you will likely save with global payments. Please do not ask physicians to have cost savings, while adding more mandates which will drive up costs even more. Please say no to any more mandates before you, lest no one be able to afford premiums. We need to streamline benefits to what is truly needed and affordable.
• And more.

The causes of rising costs are complex, so the solution must be just as complex and nuanced, if not more.

As I said, physicians are committed to working with you on these issues. We bring to the table energy, creativity, and most of all, the direct experience of caring for patients.

We’re ready to work with you on creating something that works for every stakeholder in health care.

Now, I’d like to introduce you to my colleague. Dr. Alice Coombs who is the MMS president elect, and was on the commission.