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Baker: ACA driving health consolidation

Republican doesn’t take stand on Partners acquisition

BY: Matt Murphy

STATE HOUSE NEWS SERVICE

Republican gubernatorial candidate Charlie Baker on Monday credited the trend toward consolidation and mergers in the health care marketplace to the enormous regulatory changes being imposed on the industry by the Affordable Care Act, and warned that Massachusetts doctors and hospitals would be hit harder than their counterparts in most states by cuts to Medicare to pay for the law.

Baker, the leading GOP contender for governor in 2014 and a former health insurance executive, declined to come down for or against the proposed Partners HealthCare acquisition of South Shore Hospital, which state regulators have warned could drive up costs for patients by limiting competition.

He did say that increased transparency around pricing would make such transactions easier for regulators to understand and add pressure on stakeholders to deliver the cost savings they promise through greater efficiency.

Baker said smaller provider organizations are leaning towards mergers as “someplace to hide” from the heavy administrative lift of complying with new rules and regulations.

“I think the consolidation that has taken place is mostly being driven, to some extent, by the federal reforms which are creating all kinds of issues for smaller players with respect to being able to figure out what the rules of the game are and how they fit,” Baker said. “I think the decisions that are currently in front of both the state and federal government with respect to some of the mergers are complicated and I’ll have more to say on that in a few days.”

Asked specifically about Partners and South Shore Hospital, Baker repeatedly talked about the need for transparency. Some candidates have argued that Coakley, a Democratic candidate for governor, should block the acquisition on anti-trust grounds.

“I’ve been saying for about 10 years now that I think there’s nowhere near enough transparency in the health care business. I do believe price and performance matters and it should be publicly available information and I think in a world in which there was complete transparency around what people were getting paid and how they were performing some of the issue around consolidation would become less important,” Baker said.

Baker, the former CEO of Harvard Pilgrim Health Care, flexed his health care policy chops at a conference on the Boston College campus hosted by the Graduate School of Social Work on the impact of health care reform.

The GOP candidate accepted an invitation to speak at the event before he announced his second run for governor, and largely tailored his 40-minute remarks to the audience of social workers. “For those of you looking for some sort of political stump speech, you will be sadly disappointed,” Baker said.

Baker was invited and introduced at the event by Marylou Sudders, a former commissioner of mental health under Republican Govs. William Weld, Paul Cellucci and Mitt Romney who Baker recruited to state government in the mid-1990s and now serves as Coakley’s appointee to the Health Policy Commission.

On the campaign trail, Baker has repeatedly said Massachusetts should continue to push for a full waiver from the Affordable Care Act because of the reforms already in place from the 2006 law signed by Gov. Mitt Romney and the already high rate of insured in the state.

Though Massachusetts may be insulated to some degree from the expansion of coverage under the ACA because of its high rate of insured, Baker said social workers will be forced to navigate a new system where primary care doctors will not have the capacity to fully serve the ranks of the newly covered.

Though Baker said this will place added importance on team care delivery, which he supports, he said it remains to be seen how provider networks will divvy responsibilities and said it will be critical that roles and expectations are clearly defined for everyone in a patient’s care team.

Baker also said that Medicare cuts under the Affordable Care Act will disproportionately impact Massachusetts providers. “They’re big, and they cut pretty broadly on the health care delivery side and in Massachusetts they cut in a particularly bad way,” Baker said.

While providers in other states will see some of the cuts offset by a reduction in uncompensated care for the uninsured, Baker said the state’s low rate of uninsured means providers in Massachusetts will have to swallow the Medicare rate cuts without the benefit of expanded coverage.

The aging Baby Boomer population, which will increase the Medicare population over time, will only exacerbate the problem, Baker said.

Baker also predicted that the ACA would lead to a decrease in employer-sponsored coverage and more individuals purchasing health plans on their own through state exchanges.

Because individuals will be more inclined to purchase cheaper, narrower products with limited doctor networks that fit their needs, Baker said frontline social workers will likely find themselves helping patients to navigate the details of the tailored plans.

Asked what the role for state government should be in the changing dynamics of the health care field, Baker said his wish would be for federal and state policymakers to realize that a one-size-fits-all approach to health reform doesn’t necessarily serve the needs of different populations.

Baker said the current “transactional model” works well for 95 percent of the population that consume 50 percent of services, but are relatively healthy and only interact with the system once and awhile.

For the remaining 5 percent that may have multiple illnesses and mental or behavioral health needs, he said those patients “pinball all over the system” because it isn’t well organized. To address this discrepancy, Baker said the state should be “a little less rule driven” and more interested in “creative non-compliance” by providers with good ideas to serve vulnerable citizens.
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