a part of "The Path Forward for Academic Medical Centers: Innovation", Economics and Better Health, an Economic Studies and Engelberg Center for Health Care Reform event at the Brookings Institutuion

1. Massachusetts Health Care
Reform and Impact to BMC
April 27, 2009

2. Principles of Massachusetts
Health Care Reform 2
1. Near-universal coverage
2. Shift DSH funding to coverage
3. Increase Medicaid rates
4. Business does its share
– Provide coverage, or pay a Fair Share “Tax”
5. Cost & Quality Review

3. Coverage 3
Results
Newly insured to date: Est. 2.6% remain uninsured,
432,000 growth in insured
Expand Medicaid 76,000 growth
New subsidized product 169,000 enrolled
New individual/small group 39,000 enrolled
options
Employer based insurance 168,000 growth

4. Coverage
4
Eligibility process challenging for
Low-Income population
Annual eligibility determination required
• Manual, mail-based process results in thousands
inappropriately losing eligibility
Peak enrollment of 175,000 down to 169,000 resulting from:
• Ongoing churning
• Manual system

5. Coverage
57% newly insured are in Subsidized 5
Products
Commonwealth Choice
individual/small group
product
Medicaid
9%
18%
Employer-based
insurance
34%
Commonweatlh Care
subsidized Product
39%

6. Newly Insured in Massachusetts
by Region 6
Geographic distribution of newly insured in Massachusetts is
only available for the new subsidized product,
Commonwealth Care.
Commonwealth Care enrollment distribution
Greater Boston 44,064
Northern Massachusetts 35,511
Southern Massachusetts 37,325
Central Massachusetts 28,253
Western Massachusetts 23,847
Total Massachusetts 169,000

7. Funding 7
Results
Shift DSH Funding Safety Net financial support
devastated, impacting hospitals
serving a disproportionate share
of low-income.
Increase Medicaid Rates Mass. Hospital Assoc. reports
actual rate decreased to 70% of
Reform intent to increase
costs.
hospital rates from 80% to
95% of costs.

8. Business, Cost & Quality 8
Results
Business Does its Share
-Provide coverage 168,000 additional employees
purchased insurance
-Pay Fair Share “Tax” Limited revenue collected
Cost & Quality Review Efforts recently launched
Chapter 305

9. BMC’s Role in Health Care Reform 9
Coverage
• Moved more patients to coverage than all other hospitals in
Massachusetts combined
• 150,000 low-income patients served annually
• BMC HealthNet Plan is the largest insurer of care to
Medicaid and Commonwealth Care with 250,000
members.
Financial Impact
• Payments to BMC are down to 64 cents/dollar
• FY 2010, BMC to receive $221 payments cut for low-
income patient care

10. BMC’s cost increases averaged only 4% per year
while payments fell dramatically below cost for 10
the same volume of low income patients
160,000 $600,000
140,000
$500,000
120,000
Unduplicated low-income patients
$400,000
Cost & Payments 000's
100,000
80,000 $300,000
60,000
$200,000
40,000
$100,000
20,000
0 $0
FY 06 FY 07 FY 08 FY 09 FY 10
Medicaid Commcare Uninsured Cost Payments