Governor Deval L.  Patrick
Health Care Reform Forum
State House, Boston
Tuesday, April 5, 2011

Thank you, Mr. Secretary.  Thank you, Madame Secretary.

I’m very glad you’re here because we have a big big challenge, and it’s not just my challenge and it’s not just primarily a government challenge.  It’s our challenge as a community.  So I’m glad you’re here today, and I hope you brought your A game because we have a significant challenge to face together, a challenge that faces government, businesses and working families -- and we need to face it together.  The challenge concerns the escalating cost of health care.  And today, we want to talk about your ideas and ours to contain those costs. 

It will seem daunting to some of you; I know it.  But I believe that just as we have shown the Nation how to expand coverage to everyone.  Massachusetts can and will be the ones to crack the code on cost containment.  It won’t be easy, but it will be done.  And you will all be a part of that achievement.

My team will lead today’s discussion in greater detail about the scope of the challenge and the range of proposed ways to meet it.  This is meant to be interactive – because this is more than a government problem; it’s a problem facing the whole of the society. But let me take a minute at the outset to offer my own views about where we are, where we’re going, and how we’re going to get there.

First, where are we?

As you all know, Massachusetts leads the Nation in health care coverage for our residents.  98 percent of our neighbors have health insurance today.  99.8 percent of children.  No other state in America can touch that.  Many of you here are all part of producing that accomplishment.  More people than ever get their care in lower cost primary care settings. 

The 2006 health care reform is something of which I think we all can be proud.  In addition to a successful piece of reform legislation, it is an expression of shared values, our belief that health is a public good and that everyone in Massachusetts deserves access to good care. 

All things being equal, health care reform is affordable.  It has only increased our costs by 1 percent of the total state budget.  Both the Bush and the Obama administrations have allowed considerable flexibility under Medicaid, which has helped enormously, and we are working together to get similar flexibility on the Medicare side of the ledger.  Overall, Medicaid represents 32% of annual state spending today and has grown about 2% per capita since our reforms were enacted. 

The problem is that all things are not equal.  Health care premiums increase at an unsustainable rate.  Having insurance premiums that rise sharply year after year, even during the Recession, is a national problem.  Some of the conservative commentators want you to believe that this is happening because of health care reform, but they are wrong.  They are wrong.  Premiums increased across the Nation on average 130 percent over the last decade.  A low-cost state like Mississippi, which has not moved to expand coverage as we have, is still experiencing projected premium increases of 114 percent.”  As a result, across the Nation, just like across the Commonwealth, working families, small businesses and governments are being squeezed by cost increases that we can do little about. 

In state government alone, between MassHealth, subsidized programs in the Connector and health insurance for our own employees, the cost of health care represents nearly 40 percent of the state budget.  Statewide, the health care burden for local governments is 14 percent of spending and growing.  In most cases we have no control on those costs, so that if they escalate it simply squeezes out education and public safety and other worthy public services.  Let me be clear: state employees pay a fair share for their health insurance, comparable now to what employees pay in the private sector, and we are working with municipalities and their unions to re-balance that on the municipal side.  But this challenge is not going to be met by cost shifting alone.  We have to get a solution to system and premiums that are too high.

Businesses, too, are facing similar challenges just like us, especially small businesses.  I meet many small business owners who are beginning to see their commercial activity pick up and are ready to start hiring again – until they get their bills increasing their annual premium.  Double digit increases send them scrambling to find new carriers, with less coverage at the same price or the same coverage with higher deductibles, in an annual ring-around-the-rosy of shifting plans.  I have yet to meet a business owner in the state, especially a small business owner, who doesn’t see health care costs as a major roadblock to adding jobs.  This is an urgent concern for all of us, because small businesses represent 85 percent of all businesses in our Commonwealth.  If they don’t hire, we don’t get a recovery.  It’s as simple as that.

So, where do we need to go?

The good news is that there’s an emerging consensus about solutions.  By most accounts, higher quality care -- meaning well-integrated, whole person care -- equates to lower cost.  Instead of the fragmented, fee-for-service system we have today, we ought to pay for integrated care.  Paying for that kind of care will encourage different kinds of behaviors in the delivery of care – with the added benefit of restraining cost increases to about the rate of GDP growth.  The legislation that we have proposed gives us some new tools to get there.  Secretary Bigby and Secretary Gonzales and I will lay out in more detail what is in the bill.

Many of you have already played a role in shaping the path we are on and have used your expertise to draw up the best practices that we are trying to scale up through this bill.  Blue Cross Blue Shield has developed a version of outcome-based reimbursement they call the Alternative Quality Contract.  Atrius Health is an example of a successful Accountable Care Organization.  Our really remarkable network of community health care centers has long been a model for preventive care in lower cost settings.  There are many good things happening in the market right now.  But we need scale, we need a set of common expectations and standards, and we need the savings to be passed on to premium payers. 

So, bringing working solutions to scale, setting standards and meeting expectations, and getting the savings down to the premium payers.  That is where we are going.  And we need to get there quickly.

Now, how are we going to get there?

In a minute, the panel will talk about the efforts currently underway to address these challenges, and as I said, I want you to get into it, refine it, tell us about what is working and what’s not.  I’ve heard so much of this conversation.  So many layers of for so long.  And even with this bill, I hear some people say that the government doesn’t go far enough.  I hear other people say we’re going to have too much government.  Let me tell you something.  I am a private marketer. Not a market fundamentalist.  I don’t think the market always gets it right, and I don’t think the market has got it right this year.  We are going to have to solve this problem of health care—public and private, working together.  And we have got to stop being defeated by the complexity of it because while we may not have all the answers there are small businesses and working families and local communities going under because of this unsustainable rate and you know it. You know it, how complicated it is to and how urgent it is.  As we work together going forward, bear in mind two of the profoundly important lessons from the first round of health care reform.        

First, don’t let the perfect be the enemy of the good.  One of the phenomenal accomplishments of the first round of health care reform is that we stopped limiting ourselves to the same old two competing choices: a perfect solution or no solution at all.  We chose to try something and we moved.  And it worked. 

Second, stick together – with us and with each other.  For years before the 2006 legislation, folks said that health reform would never happen.  And for years it didn’t.  It took a broad coalition of business, labor and health care leaders, patient advocates and policy makers, working with a Democratic legislature and a Republican governor to get it done.  They didn’t get distracted by drama or overheated rhetoric.  And not only did they come together to pass the bill, but they stuck together to adjust it as we implemented and refined it.

That, I think, must be the model for what we’re doing now and this session is an important step in shaping that outcome.  The details of health care reform may be complicated, but our goals and our values are simple – even universal.  Better, more affordable health care for us all. 

Lastly, and mindful that the health care industry parses everything I say with a fine tooth comb, like the ancient Greeks reading entrails, let me leave no doubt about this: we are moving.  We are not going to let inertia stand in the way stand in the way of relief for working families and businesses.  We have already used the regulatory authority of the Insurance Commissioner, and new tools in last summer’s Economic Development legislation, to curb premium increases.  But our communities and our neighbors need us to do more.  And it’s up to all of us to deliver.

Just as in the first round of health care reform, this is about what kind of Commonwealth we want to live in.  If we want a better, stronger Commonwealth for ourselves and for the generations to come, we need to work together to get this right.         

Thank you again for your participation today and going forward.