Innovation in Funding Prevention and Reducing Costs of Health Care in Massachusetts

For this study the Institute on Urban Health Research and Practice at Northeastern University will develop a white paper and a series of related documents that examine the implications of the various Massachusetts health care and payment reform bills for the financing of both public health and health-promotion efforts within the state.

Health CareHistorically, the health care delivery system has focused on the provision of clinical care to individual patients with an emphasis on the screening, detection and treatment of disease.  The public health system, on the other hand, has largely concentrated its efforts on prevention and population-wide health improvement.   There has long been some overlap in the two systems: for example, both systems provide flu vaccines, offer treatment for sexually transmitted infections, and educate individuals about the dangers of smoking.  Nonetheless, the two systems have largely sources–public and private insurance on the one hand and governmental funding, often in the form of grants, on the other.

However, there are new opportunities for integration of the two systems as a result of the passage and implementation of the Affordable Care Act (ACA), the impact of the recession, the increased emphasis on cost control, and the growing recognition of the importance of addressing the social determinants of health.

Massachusetts has been a laboratory for innovative health care and payment reform initiatives.  Beginning with the passage of its groundbreaking health care reform legislation in 2006, the state has been engaged in noteworthy approaches to increase access to health care, to heighten attention to quality, and, most recently, to implement steps to reduce the increasing cost of health care provision.

While Massachusetts has   guaranteed health-care coverage to a larger percentage of its population than any other state, it postponed tackling the thorny issues of cost and quality until 2012.  Addressing these issues was unavoidable because Massachusetts’ health-care costs had escalated at an unsustainable pace, creating pressure on consumers, employers, providers, and insurers alike.

The 2012 cost containment bill is formally known as an “Act Improving the Quality of Health Care and Reducing Costs through Increased Transparency, Efficiency and Innovation.” It is often referred to as Chapter 224.  The historic bill, which could become a model for other states, aims to save $200 billion over the next 15 years by linking health care cost increases to the growth of the state’s economy.

With its passage there is a move away from the current fee-for-service system, which pays for procedures, tests, and clinical visits but does not pay for telephone or email consultations, home visits, or wellness promotion and disease prevention education.  In the improved delivery system, there are incentives to strengthen the relationship between the primary-care provider and the patient, to adopt team-based care that is better integrated and patient-centered, and to create financial incentives for value-based care with mandated quality outcome measures.

When combined with the changes in the preceding health care reform bills, the 2012 bill creates the possibility that these quality outcome measures could include prevention and population-based health indicators.  Of particular note, the bill establishes a first-in-the-nation Prevention and Wellness Trust Fund: a four-year, $60 million commitment to community-based public health initiatives and workplace wellness efforts.  During 2013, as much as $15 million will be distributed by the Fund to public health programs, many of which will likely be integrated into or linked to clinical care.

For this study the Institute on Urban Health Research and Practice at Northeastern University will develop a white paper and a series of related documents that examine the implications of the various Massachusetts health care and payment reform bills for the financing of both public health and health-promotion efforts within the state.  The paper will analyze the Massachusetts experience and identify lessons that may be beneficial to other public health officials and policy makers.

Associated IUHRP Staff

John Auerbach, MBA

John Auerbach, MBA

Principal Investigator