Radiology’s Value Proposition: The Massachusetts Experience

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On September 9, 2013, Cheryl Proval, editor, Radiology Business Journal, moderated “The Boston Experience: Radiology’s Value Proposition in the New Health-care Paradigm,” a panel discussion held in Boston, Massachusetts, at the RBMA Fall Educational Conference.  The meeting location offered a unique opportunity to explore radiology’s changing value proposition under health-care reform with a panel that represents hospital-based radiology, outpatient radiology, and the payor community.

Steven E. Seltzer, MD, FACR, has been chair of the department of radiology at Brigham and Women’s Hospital (Boston, Massachusetts) and Philip H. Cook professor of radiology at Harvard Medical School since 1997.

Michael Sherman, MD, MBA, is senior vice president and CMO of Harvard Pilgrim Health Care (Wellesley, Massachusetts), a full-service health-benefits company. He serves on the advisory board of the Institute for Clinical and Economic Review and on the board of directors of Massachusetts Health Quality Partners.

Patricia Whelan-Downey, MHA, is CIO of Shields Health Care Group (Quincy, Massachusetts), a leading provider of outpatient diagnostic imaging for 25 years, and is senior partner of Shields Consulting.

Proval: Massachusetts is the birthplace not only of the American Revolution, but also of the revolution in US health care. The state went live, in 2007, with its brand of health-care reform, widely seen as the model for the federal Patient Protection and Affordable Care Act.  How did health-care reform affect what Harvard Pilgrim was looking for from radiology?

Sherman: In Massachusetts, we were first—ahead of the curve—in universal access. I think we are getting a lot of scrutiny to answer these questions: What happens after you do that, and what happens to cost? The good news is that virtually all of our citizens in Massachusetts have coverage.

We are number one in many things, however, and unfortunately, one of those things is per-capita cost (among the 50 states) in what we spend on health care for our population. Part of it is that we have world-class providers, and some of them are expensive. It’s an expensive part of the country, too.

We also have a state that likes mandates. We have mandates that many other states do not have concerning autism, infertility, and other conditions. These are not inherently good or bad, but when you put those in place, they do raise costs.

Jump ahead from the onset of universal access to today: We’re in an expensive market, and there’s concern about our ability to pay for care. Massachusetts Chapter 224 passed last year; that is a law that says, OK, good job getting access: Now, we need to think about value.

One of its implications is that the state has decided that health-care costs should not grow any faster than 3.6% per year (which policymakers estimated as the probable equivalent of growth in the state’s version of the gross domestic product). This has payors and providers thinking, together, about how to work toward a 3.6% goal.

It’s having an impact on how we contract—and on how we look at coverage policies (in terms of products, narrow networks, lower price points, and other types of innovative products that we have. It has to do with how we are looking at our informatics capabilities and how we are partnering with the physician community, which presumably would have some enforcement mandate.

That’s important stuff, but ultimately, we’re not quite sure what happens if we don’t keep cost increases at less than 3.6%. It’s been suggested that you’ll be taken before the state attorney general’s office.

We did partner with a radiology benefit management (RBM) company, and that’s helped keep our trend to 3.6% for radiology, over the past five years. It was higher, before that.

Proval: What did Brigham and Women’s Hospital want from you?

Seltzer: We are in the sixth year of what we jokingly call RomneyCare (though it was disavowed by the presidential candidate), and 99% of adults and 99.5% of children in the Commonwealth of Massachusetts have health insurance. The initial impact of universal coverage on a provider radiology department such as ours was not that significant.

We had always had a core value of being a payor-agnostic department and would cover patients with or without health insurance. We saw a little bit of an uptick in demand, but not a tremendous difference.

Predictably, the costs borne by the state government went up—because one of the ways that we got the uninsured