At the Becker's Hospital Review Annual Meeting in Chicago on May 10, Walter W. Morrissey, MD, senior vice president of Kauffman Hall, and Dan Clarin, assistant vice president of Kaufmann Hall, presented healthcare in Massachusetts and California as a lens through which to see the future direction of healthcare. "Massachusetts and California stand as examples of innovators and early adopters of healthcare reform," said Mr. Clarin.
The shifting landscape of healthcare produces a world of uncertainties. The provider environment is becoming increasingly competitive and revenue continues to come under pressure. It is growing risky to compete on a volume and rate basis as value-based care steps on to the scene. New core competencies are needed as the competitive healthcare world becomes shaped by contract providers, population health managers and new major participants in the field. Massachusetts and California serve as opportunities to glimpse the future of healthcare.
Massachusetts healthcare legislation shares similarities with PPACA legislation, but has an earlier implementation date. Massachusetts legislation implemented in 2006 enacted insurance market reforms, insurance exchange and expansion of public coverage, including Medicaid eligibility. Since then, Massachusetts has achieved nearly universal coverage said Mr. Clarin. The increased insurance coverage did not produce an increase in utilization patterns. However, healthcare spending continues to be on the rise in the state. "Healthcare crowds out all other areas of the state's budget," said Mr. Clarin.
Value-based care in Massachusetts has revolved round tiered, narrow networks, ACOs and payment reform and provider partnerships with payors. Massachusetts has been experiencing a decline in utilization and a race to acquire physician practices.
Though California and Massachusetts both foreshadow changes in healthcare, the states provide two different perspectives. California has a population of 38.2 million, while Massachusetts has a population of only 6.6 million. California stands on much larger scale with the great number of hospitals creating fragmentation. The presence of Kaiser places pressure on other providers. Hospitals cannot employ physicians. "California is practically a different world," said Dr. Morrissey.
Though managed care vanished from many places after the 1990s, it remained firmly in place in California. Currently, the number of uninsured in the state is above national averages and rising. Though this remains an issue, California's utilization and healthcare spending remains well below the national averages. California's lower spending can be traced back to its payor mix, 50 percent of which is driven by HMOs.
As in Massachusetts and California, large systems are beginning to focus on markets through physician and hospital partnerships. Competition to become a population manager is only going to increase. In light of the examples seen in Massachusetts and California, hospitals across the country must now focus on utilization, healthcare spending, physician alignment, new market entrants, consolidation and population health management.
The shifting landscape of healthcare produces a world of uncertainties. The provider environment is becoming increasingly competitive and revenue continues to come under pressure. It is growing risky to compete on a volume and rate basis as value-based care steps on to the scene. New core competencies are needed as the competitive healthcare world becomes shaped by contract providers, population health managers and new major participants in the field. Massachusetts and California serve as opportunities to glimpse the future of healthcare.
Massachusetts healthcare legislation shares similarities with PPACA legislation, but has an earlier implementation date. Massachusetts legislation implemented in 2006 enacted insurance market reforms, insurance exchange and expansion of public coverage, including Medicaid eligibility. Since then, Massachusetts has achieved nearly universal coverage said Mr. Clarin. The increased insurance coverage did not produce an increase in utilization patterns. However, healthcare spending continues to be on the rise in the state. "Healthcare crowds out all other areas of the state's budget," said Mr. Clarin.
Value-based care in Massachusetts has revolved round tiered, narrow networks, ACOs and payment reform and provider partnerships with payors. Massachusetts has been experiencing a decline in utilization and a race to acquire physician practices.
Though California and Massachusetts both foreshadow changes in healthcare, the states provide two different perspectives. California has a population of 38.2 million, while Massachusetts has a population of only 6.6 million. California stands on much larger scale with the great number of hospitals creating fragmentation. The presence of Kaiser places pressure on other providers. Hospitals cannot employ physicians. "California is practically a different world," said Dr. Morrissey.
Though managed care vanished from many places after the 1990s, it remained firmly in place in California. Currently, the number of uninsured in the state is above national averages and rising. Though this remains an issue, California's utilization and healthcare spending remains well below the national averages. California's lower spending can be traced back to its payor mix, 50 percent of which is driven by HMOs.
As in Massachusetts and California, large systems are beginning to focus on markets through physician and hospital partnerships. Competition to become a population manager is only going to increase. In light of the examples seen in Massachusetts and California, hospitals across the country must now focus on utilization, healthcare spending, physician alignment, new market entrants, consolidation and population health management.