Before the Joint Committee on Public Health
The Massachusetts Medical
Society wishes to be recorded in strong opposition to House 1919, “An Act
Relative to an Affordable Health Plan.”
The MMS recognizes that rising health care premiums take an especially
large toll on many small businesses in Massachusetts; many physicians are small
business owners themselves. We also recognize that all health care providers
play a role in helping to moderate those increases. However, we do not believe
that this legislation will appropriately achieve the underlying goal.
If
passed, House 1919 would require all physicians, as a condition of licensure,
to accept “Affordable Health Plan” patients at 110% of the Medicare rates. There
is no predicting how many patients will enroll and how that will impact a
physician’s practice. There is no “out”, as the bill specifies that the
physician would have to accept all such patients if he/she participates in any
other plan offered by that insurer. Such a plan has the potential to
exacerbate the “churning cycle” practice of medicine, i.e., in order to remain
financially viable under the stress of lower reimbursement rates more patients
have to be seen, more procedures have to be done, less time is spent with each
patient forcing a decrease in quality and potential increase in the cost of
healthcare.
This
bill regulates output prices without any recognition that providers have
limited control over input prices such as labor, pharmaceuticals and medical
devices. There are many factors responsible for the increase in premiums.
Rising unit costs and greater utilization are the two that are most frequently
mentioned. While H. 1919 may address unit costs by forcing providers to accept
110% of Medicare rates, it does little to address utilization, consumer
preference, administrative costs, employer demand, broker commissions, and
health plan rating practices that determine small group premiums. In fact, by
prohibiting the ability of physicians to cover the necessary costs of care,
this bill will only serve to exacerbate the impact of chronic underfunding by
government payers. It is also worth noting that the bill contains no
requirements for health plans to do anything to reduce costs other than to
offer an “affordable” product. Nor does the bill address the flexibility
insurance companies have to differentially adjust rates for individual groups
and employers, flexibility that the insurers have used to great effect, as
illustrated by the significant differences in reported premium increases among
small groups. In order to effectively moderate the rise in premiums, it is
necessary to understand all parts of the cost equation- until that is
accomplished, legislation such as House
1919 is ill advised.
The MMS
urges the Committee on Public Health to report House 1919 out of committee unfavorably.
