Last Updated 23 Mar 2020

Stakeholders in Health Reform

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When talking about healthcare reform, one must always think about the stakeholders. Stakeholders are “people and organizations that have a stake (interest) in what a healthcare organization does and that could affect the healthcare organization” (Olden, 2011). There are many different stakeholders in our case study but we will focus on the main ones. In Massachusetts, the Massachusetts Health Care Reform Act had a considerable impact on hospitals and the health care system.

Most community health centers were benefiting from coverage expansions and safety net hospitals were struggling financially due to the fact that the state put more funding towards insurance subsidies to expand coverage. Academic medical centers (AMC) were able to command higher prices and attract more patients from community hospitals due to the fact that policy makers kept putting off making decisions about slowing the growth of healthcare spending.

AMCs “received the highest payment levels and were able to negotiate the largest percentage increases, which increased the spending trends and widened the disparities between have and have-not providers in the market. ” The more prestigious, big name hospitals had more power and thus could exercise more leverage. AMCs also expanded to the suburbs, which posed a considerable amount of threat to community hospitals by “raising the rates paid for services delivered in community settings and by increasing the number of referrals to downtown AMCs, which command the highest rates. Physician/ providers who owned free-standing, ambulatory centers had been approaching hospitals with offers to sell their facilities due to the fact that they were becoming less profitable due to “updated fee schedule and more aggressive health plan utilization management. ” Physicians were also aligning themselves with hospitals and other larger practices. Small practices risked losing a large share of their patient panels if they dropped out of health plan networks.

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The impact on the smaller, less prestigious hospitals/ healthcare systems were definitely negative, while the impact on larger, more prestigious hospitals/healthcare system seemed considerably more positive and beneficial. In regards to employers, according to the Massachusetts Health Care Reform Act (the Act), on July 1, 2007, Massachusetts employers with 11 or more full-time employees working in Massachusetts had three principal obligations. First, Massachusetts employers had to either make a “Fair and Reasonable Premium Contribution to heir employees' health care premiums or make a contribution to the Commonwealth of Massachusetts of up to $295 per year per employee. Second, Massachusetts employers had to establish a cafeteria plan for their employees under Section 125 of the Internal Revenue Code. Finally, every employer was required to report whether the employer has offered to pay for-or to arrange for-health care insurance coverage and whether the employee has accepted or declined it” (James, 2007). If employers did not comply, they would face hefty fines.

A provision of the Act was the merger of the small group and individual or non-group insurance markets, which was designed to make premiums more affordable for individuals. Small group premiums actually increased by 2. 6%. “The premiums of small employers had increased substantially since the merger of the small group and individual health insurance markets” (case study). Employers who were merged into the small group and non-group market “felt the impact of rising premiums because they were now subsidizing individuals in that market” (case study).

Large employers didn’t really feel any impact except for the hassle for complying with the reporting requirements. Smaller employers usually didn’t have the manpower to guide them through the Act’s requirements, which put them at a higher risk of not being compliant. Overall though, compliance became a lot more challenging and “annoying” for employers. Insurance providers are also “major” stakeholders in healthcare policy and decision-making.

Though they can be very influential in the healthcare policy and law decision-making process, they also are probably the most vilified. In Massachutettes, health plans wanted to eliminate “continuous open enrollment, assess the full annual penalty for any significant period of continuous un-insurance, impose waiting periods for certain services and bar consumers from buying in the merged market if they had access to employer sponsored coverage” (case study). Doing these things, the insurance companies hoped to lower premiums.

Bill 2585 did pass but the law did not go as far as the insurance companies had hoped. It only “limited open enrollment in the merged market to twice a year in 2011 and once a year after that” (case study), which didn’t really help much. Due to loss in the small market group in 2009, health plans “planned double digit premium increases in 2010” (case study), but the government stepped in and put a stop to it. Even though the big name hospitals were driving up cost, the insurance companies were seen as the bad guys.

This caused local plans to “record sizable operating losses for the first quarter of 2010 and had to draw on reserves to cover expected losses resulting from the rate rollbacks” (case study). The insurance companies, especially the smaller ones, suffered financially. The most important stakeholder in the healthcare policymaking is probably the patient. In Massachusetts, the Act provided “nearly universal health insurance coverage” (case study). In 2009 the uninsured dropped from 8. 2% to 2. 7%. People who had previously been uninsured and had no way to get proper healthcare, could now do so.

There were some issues though. According to the Act, “the youngest and healthiest could avoid being the merged risk pool by purchasing less expensive coverage in a separate young adult market or by remaining on their parent’s plan until they turn 26” (case study). This was good for those patients but for others, it was a big issue because it was causing premiums to increase. Freestanding, ambulatory centers were being sold to hospitals. This increased the rates paid for services delivered at these facilities.

Patients who “were covered by employer-sponsored insurance can buy short-term policies so that they can get access to treatments which are not usually covered in their regular plans” (case study). This is known as jumping in and out. Jumping in and out of these short-term plans caused premiums for other patients to up, which was one of the big issues that health plans wanted to resolve. Policymakers also proposed provider rates or giving the state the authority to tie provider rate increases to medical inflation in order to contain cost but nothing really came of that.

There are many stakeholders involved in healthcare reform in Massachusetts. These included patients, hospitals and health systems, employers and insurance providers. There are of course other stakeholders that are on a smaller scale, such as medical equipment providers, healthcare advertisers and so forth but we wanted to focus on the major ones. Works Cited: James, L. H. , ; Rebecca, F. A. (2007). The massachusetts health care reform act: What employers need to know. Employee Benefit Plan Review, 61(12), 17-19. Retrieved from http://search. proquest. com/docview/216889767? accountid=10559.

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