Table Of Content

Millmilinn ..„."MASS/AMHERST ... * chusetts Division of Health Care Finance and Policy 3120bb 0270 M 232 5 Massachusetts r Health Care Trends: 1990-1999 n fTO.-It! i October 2000 Louis Freedman; Commissioner I. Argeo Paul Cellucci, Governor William D. O'Leary, Secretary Commonwealth of Massachusetts Executive Office of Health and Human Services Massachusetts Health Care Trends: 1990-1999 October 2000 Louis Freedman, Commissioner I. Digitized by the Internet Archive 2014 in https://archive.org/details/massachusettshea00mass_1 Massachusetts Health Care Trends: 1990-1999 Foreword "Chapter 3: Health Care Delivery Sys- tem" (see pages 33-62) includes information concerning the financial margins of hospitals, nursing homes and community health centers, but in the textwe referto the related financial margins of HMOs found in "Chapter 2: Health Care Financing" (see pages 19-32). Suchdistinctionsbetween providers and financiers are somewhat arbitrary given the role-blurring that occurred over Two — approaches chronological and the last ten years (see page 2), but the reader geopolitical—governedmuchofwhat is directed to related graphs when relevant. is included in Massachusetts Health The appendices include a reference list Care Trends: 1990-1999. We looked at our of hospital and HMO consolidations, and a health care system in the broadest possible time line which provides a helpful chron- way and asked two basic questions: How has ological listing of events. As time passes the system changed since 1990 and in what and certainchanges areinstitutionalized, it's ways does it differ from the United States as often difficultto rememberwhen the HEDIS whole? data set measuring health plan performance "A Decade in Review" (see page 1), is was established (see page 84) or when Har- an analysis of actual events whose meaning vard Community Health Plan and Pilgrim and significance in the larger picture is open Health Care became Harvard Pilgrim Health to interpretation. We offer an interpreta- Care (see page 86). tion that rings true to us from our vantage Many who will read this report are pri- point, knowing that others will have differ- marily concerned with the health of the ent interpretations of the same events. system, others with the health of institu- The bulk of the report is a chart book, tions, andstillotherswiththehealth ofindi- an extensive set of graphs with explanatory viduals. We hope that Massachusetts Health bullets, some of which draw the reader's Care Trends: 1990-1999 serves all equally attention to related information in another well and that you will come back to it again section. and again. iii I II II II II II II '! ii I i i i i 1 I I Massachusetts Health Care Trends: 1 990-1 999 A Word About the Division Satisfying the Need for Health Care Information The effectiveness of the health care system depends in part upon the availabil- ity of applicable information. In order for this system to function properly, purchasers must have accurate and useful information about quality, pricing, supply and available alternatives. Providers need infor- The Division of Health Care Finance mation on the productivity and efficiency and Policy collects, analyzes and dis- oftheirbusiness operations todevelop strat- seminates information with the goal egies to improve the effectiveness ofthe ser- of improving the quality, efficiency and vices they deliver. State policy makers need effectiveness of the health care delivery to be advised of the present health care system in Massachusetts. In addition, the environment, as they consider where policy Division administers the Uncompensated investigation or action may be appropriate. Care Pool, a fund that reimburses Massa- As part of its health care information chusetts acute care hospitals and commu- program, theDivisionofHealthCare Finance nity health centers for services provided to and Policy publishes reports to meet this uninsured and underinsured individuals. need for information. These reports focus Mission The Division's mission is to contribute to the development of policies that improve the delivery and financing of health care in Massachusetts by: • collecting and analyzing data from throughout the health care delivery system; • disseminating accurate information and analysis on a timelybasis; • facilitating the use of information among health care purchasers, providers, consumers and policy makers; and • ensuring access to health care for low-income uninsured and underinsured Massachusetts residents through thoughtful administration ofthe Uncompensated Care Pool. v on various health care policy and market improve health services to uninsured and issues. underinsured persons while reducing the demand on the Pool to finance free care. Organizational Structure Finally, the group is charged with providing information to consumers on managed care The Division of Health Care Finance organizations in Massachusetts. and Policy is an administrative agency within the Executive Office of Health Health Data Policy Group and Human Services. The Commissioner is The Health Data Policy Group (HDPG) appointed by the Governor. is charged with the development and appro- The organizational structure is com- priate use of Division databases and is prised of several distinct groups: responsible for evaluating health care data managementissuesacrossorganizationsand • Health Systems Measurement and providing information and reports to pro- Improvement Group viders, plans, researchers and the govern- ment. • Health Data Policy Group HDPG is responsible for the collection and release of hospital discharge data and • Pricing Policy and Financial observation stay data. The group is also Analysis Group responsible for managing the release of accurate hospital and nursing home cost • Audit Compliance and Evaluation and financial data. HDPG, in partnership Group with other organizations, uses these data for projects that involve benchmarking. Each group is responsible for a differ- HDPG develops products that meet antici- ent aspect of the agency mission. pated information needs including industry trends, data products and custom reports. Health Systems Measurement As well, HDPG is responsible for developing andImprovement Group and implementing confidentiality and pri- The Health Systems Measurement and vacyprotocols fortheuseofdata. The group Improvement Group (HSMIG) works to conducts research and evaluates new health improvethedeliveryofhealthcareinMassa- data policy issues such as national standards chusetts by evaluating the changing health for electronic data interchange and privacy care system and providing useful analyses legislation. and information to policy makers, health care providers, and purchasers. The group PricingPolicy also conducts health services research and andFinancialAnalysis Group policyanalysis for avarietyofdifferent audi- The Pricing Policy and Financial Anal- ences to improve the delivery and value of ysis Group develops health care policies, care. In recent years, the Group has ana- methods and payment rates that support lyzed and reported on several areas of inter- the procurement of high quality services for est, including preventable hospitalizations, public beneficiaries and that promote pro- hospital readmissions, health care reform in gram goals and efficiency in the health care HMO Massachusetts, trends in premiums delivery system. This group also administers and insurance status. The group manages the Uncompensated Care Pool in a manner demonstration projects funded through the that ensures access to health care for low- Uncompensated Care Pool whose goal is to income uninsured and underinsured indi- vi Massachusetts Health Care Trends: 1990-1999 viduals, thatpromotesoperationalefficiency Office ofthe General Counsel and simplicity of administration, and that The Office of the General Counsel liti- is coordinated with the Commonwealth's gates administrative appeals filed by pro- network of health care initiatives for this viders, analyzes proposed legislation relative population. In addition, the group provides to the health care delivery system and pro- information, analysisandrecommendations vides legal advice to the Commissioner and to policy makers to support their health staffconcerningthedevelopment and appli- care financing decisions, and performs spe- cation of regulations, policy positions and cialized analyses of innovative health care pricing information. financing and purchasing methods. Office ofCommunications Audit Compliance The Office of Communications per- and Evaluation Group forms a wide array of services for the The Audit Compliance and Evaluation Division. These responsibilities include: (ACE) Group examines financial data reported to the Division of Health Care • handling inquiries from the media Finance and Policy. The ACE Group per- and other outside parties; forms audit, review, screening and quality control functions that provide the building • editing, designing and producing blocks for the Division's work in develop- the Division's print publications; ing pricing policies and measurement tools to improve the health care system in Mas- • developing and maintaining the sachusetts. agency's Internet web site; The Division of Health Care Finance • editing, designing and producing and Policy's support units include Adminis- presentation materials; tration, the Information Technology Group, the Office of the General Counsel and the • representing the agency at health Office of Communications. care conferences; and Administration • serving as the point of contact for The Office of the Executive Secretary many general inquiries. overseesthe agency'sbudget, regulatorypro- cess and personnel. This organizational structure reflects Information Technology Group the focus of the agency mission and sup- The Information Technology Group ports the Division's efforts to provide useful is responsible for managing the Division's information to purchasers, providers, and computer network and databases. policy makers. A Word About the Division vii viii