This is the transcript of my recent podcast interview with Steve Grossman, State Treasurer and Democratic candidate for Governor of Massachusetts. Visit the original post to listen to the podcast and read a summary. This is part of a series of interviews with all nine candidates for Governor. The full schedule is available here.
David E. Williams: This is David Williams from The Health Business Blog. I’m speaking today with Steve Grossman, Treasurer of Massachusetts and candidate for Governor.
Steven Grossman: David, I appreciate your time and look forward to the conversation.
Williams: Steve, does Chapter 224 represent the right approach to addressing rising healthcare costs? And if not, where does it miss the mark and what would you do differently?
Grossman: It’s a solid approach to curb the rising cost of healthcare. By limiting the growth of healthcare costs to the growth of the state economy, it gives a very achievable target. There are some key things we have to remember about this: namely, that it’s going to take several years to really assess how effective it is, and how effective the various ingredients contained in it are at achieving the desired results.
I look forward to seeing the mechanisms that are put in place to work and to assess them to the extent that approaches that are taken need fine-tuning. Obviously, we can deal with that down the road. I’m very much focused on not only the overall numbers relating the healthcare cost growth benchmark, but also interested in how the investments in prevention and wellness are working and how quickly – how the investments that we’re making in struggling community hospitals are having a desired effect and if not, why not.
I’m a big believer that the way we make this work is to incentivize consumers to move from the acute care hospitals for many medical situations to community health centers. The network of community health centers in Massachusetts is working extremely well and there’s no reason why they cannot appeal to a broader demographic than they have appealed to at this point. As they expand that network from the 285 locations to a higher number and more people use them, that will help to reduce cost without undermining quality of care.
I am concerned about struggling community hospitals and whether those community hospitals will have the resources to invest in what is increasingly expensive technology. So, I’m glad that some money has been put to work in health information technology and in the community hospitals.
If you look at ways in which we could improve on Chapter 224, at least examine things that are extremely important to me, I would like some thought given to how we can reduce the cost of prescription drugs. As I look at the community health centers and see the pharmacies contained in the community health centers, it’s clear that they have been successful at using the authority they have legally to reduce the cost of prescription drugs.
A dollar invested in wellness programs can save $3.27 in medical cost, which is a heck of a return on investment. I’d like to see us do our best over time to deal with that.
One of the weaknesses of the Affordable Care Act is the failure to include the multiplicity of rating factors that Massachusetts was using to help reduce the cost of healthcare for small businesses. I know the Governor has been back and forth to Washington on multiple occasions. We’ve been turned down. We’ve been given a ramp up over time. Nevertheless, there are ways in which we can help small businesses reduce the cost of healthcare and I’m hoping that we will eventually get some additional relief from the feds, even though it’s not, by any means, guaranteed.
When you asked earlier, is Chapter 224 the right approach to addressing the rising cost, the legislature and the Governor, together, did a credible job. I don’t know if there’s a perfect approach, but it is essential to look at other ways in which healthcare is being delivered and paid for in other communities. Pete Shumlin is a friend of mine. I know him well. I look forward as Governor to working with him to very carefully examine how Vermont implements single payer. I, have made it publicly clear that single payer should be on the table and should be examined very, very carefully. And I’ll be watching Vermont’s experiment closely and try to learn from that as to what role single payer might potentially play in dealing with our healthcare challenges here in Massachusetts.
Williams: Steve, there are certain provider systems in Massachusetts that are reimbursed significantly more than others for the same services, even though there are virtually no differences in quality. In your opinion, does the state have a part to play in addressing these disparities?
Grossman: It has a role to play. One of the roles is to drive transparency as a very, very important ingredient, to the extent that the consumer, the customer, knows of the differences in reimbursement rates for various and sundry procedures. More transparency lets the market work more effectively, coupled with incentives to stay local for many procedures that are more expensive in higher-cost medical institutions.
That’s an important factor that we need to take into account. The state has a responsibility to make sure that people are aware of the differences in cost. Ultimately, there are all kinds of policies offered by various insurance companies that will allow people to go on a virtually unlimited basis to any institution, regardless of the cost issues or to be more limited in terms of what they’re willing to or able to do. Reducing premiums and cost to businesses, and through that to the consumer, people tend to be incentivized by reducing cost and maintaining quality.
By trying to balance quality and cost, you can demonstrate to the consumer that they are just as well-off, if not better, going to a local medical institution for care they may have sought from a higher-cost provider. Over a period of time that will drive customer behavior. As a fundamental principle we need to consistently articulate that equity and fairness in payments, that protect both teaching hospitals and community hospitals, is something we care about.
We want high quality care. We wanted to be delivered the lowest cost, with more information, and more transparency. We also want greater knowledge on the part of every citizen in Massachusetts in terms of making his or her decisions about where they go and what it costs. Those were all critical factors in the role the state, and the Governor has to play a role in addressing these disparities. This is not meant to be punitive; it’s meant to create incentives and information. Knowledge is power on the part of consumers.
Williams: There are more than a dozen state agencies that have a role in healthcare. Is there an opportunity to consolidate or rationalize them?
Grossman: My father once said to me: “Steve, when you don’t know the answer, don’t make one up.” So, the answer, in principle, is unquestionably yes. I have a track record in the government – I’ve been Treasurer for the past three-plus years. In other parts of state government I’ve seen a number of issues that are being dealt with by a multiplicity of state agencies. Oftentimes, we are harmed by a silo approach to problem-solving: different agencies maintaining their role, holding on to their role fiercely when more collegiality and collaboration would be an entirely appropriate approach.
I talk to employers all the time in Massachusetts, and a team approach is how they flourish. They’re looking for employees who are oriented toward teamwork. When you have agencies within state government (and I emphasize, I have not looked carefully at how each of these agencies deals with its particular niche in healthcare delivery, cost containment, analysis, et cetera), if you want to utilize tax payers funds wisely, you’ve got to think about how we can be fast, flexible and entrepreneurial in terms of the way we solve problems.
I have no doubt that there’s an opportunity to consolidate or in some way rationalize [state agencies]. I haven’t looked at them in enough detail to be able to give you an answer as to what I mean by that. But if healthcare is anything like some of the more complicated issues that I deal with in the financial affairs of government, I know that when agencies within government have a philosophy of no surprises, sharing information, working together on common problems, sharing credit when the solutions are adopted, that ensures the people of Massachusetts that the right approach is taken to problem solving. I suspect in healthcare, we have a long way to go in that regard.
Williams: Government policy both at the federal and the state level has encouraged adoption of electronic medical records. However, there are many providers that complain about the systems, and the benefits have been slow to materialize. Should state government play a role in helping to realize the promise of health information technology?
Grossman: Unquestionably, yes. State government should play a role and is playing a role. We talked earlier about some elements of Chapter 224 that deal with health information technology. Presumably, a portion of the investment that we’re making with struggling community hospitals will give those community hospitals the tools they need to be 21st century institutions dealing with health information technology. As the simulation at the Beth Israel Deaconess Medical Center showed last month, electronic medical records clearly can save lives in emergencies.
While the benefits may have been slow to materialize – and sometimes painfully slow – we know from publicity over the past few months how hugely difficult it has been to implement new laws in the ways that were contemplated. The fact is that the cost of implementing health information technology can drive smaller medical institutions into the arms of the larger ones. They simply can’t afford the health information technology that they must purchase or acquire in order to be competitive.
I would like to see us play an even more significant role and I don’t know what the dollars and cents are, but I suspect they are greater than we actually have been able to invest. The Mass HIway Health Information Exchange, the old HIE, will allow healthcare providers to deal with medical records on a more secure, interconnected basis. That is a step forward. Something like 70% of physicians, if I’m not mistaken, are using these HIEs. Massachusetts may have been fairly slow to invest its initial funds and get this initiative off the ground over the past couple of years when it was transferred to Health and Human Services. Winning and gaining some additional supplemental Medicaid grants was a positive step and implementation sped up.
It’s a big, complicated area. Most citizens have read about the websites. It’s just an example of how technology failed to serve the needs that were assigned to it. Many people are probably skeptical that the technology is moving as quickly as it can. Over the long haul I believe by investing these monies we’ll see very significant dividends earned as a result of these investments. I’m a big believer in it, and I suspect we’re going to have to revisit whether or not we have put enough money to work in health information technology broadly shared.
Williams: Hepatitis C is three or four times more common that HIV. There are new drugs that can cure the infection that are coming on the market this year but they are very expensive. What role should the state play in ensuring that residents are tested, linked to care, and have access to these new medications.
Grossman: When you’ve got roughly over a hundred thousand people living with Hepatitis C, this is a public health issue and we have to offer care to our most vulnerable citizens. I don’t think a caring society can afford in any way, shape, or form not to play a significant role.
State budgets have been cut in almost every area over the past five years. State funding for HIV/AIDS, and viral hepatitis have been cut dramatically, by nearly 40% over the past 10 to 15 years. It’s hurting us. We have to find a way to make additional investments in the health of our citizens, because we will get a return on investment in the long term, and because it’s the right thing to do.
There’s a whole wave of alternative treatments going on now including: therapy and weekly injections for Hepatitis C; approval of daily pills that have demonstrated some real effectiveness; other drugs that are looking for FDA approval; and oral regimens. All these may be very expensive, but in the long run we benefit significantly and the cost will come down over a period of time.
Our cuts have hurt us, reinvesting will help us. Obviously, they should lay out a whole series of priorities having to do with health. We are talking about health, mental health, behavioral health, substance abuse, Hepatitis C, and a range of other things that are part of Chapter 224. We’re going to have to figure out our priorities and how much we can invest, but there’s no doubt whatsoever that this is an area that requires our involvement. I’m hoping we can find new approaches that will make the treatments for these infections far less expensive.
Williams: There are multiple healthcare-related ballot questions coming up in November. What are your thoughts about them?
Grossman: The citizens of Massachusetts are being treated to a rich array of ballot questions. There’s a thirst out there for citizens being stakeholders in the process by which decisions are made.
On the issue of ratios, we’ve got to carefully consider whether rigid ratios are practical at a time when we’re in a period of great transition. What I mean by that is we’ve got Chapter 224 being implemented along with the Affordable Care Act. Significant dollars are going to be taken out of the revenue stream of our healthcare institutions, particularly our major health care institutions, including our acute care hospitals. Knowing that roughly one in every six jobs in Massachusetts is directly or indirectly related to healthcare, the question is whether we can afford tight and rigid ratios at a time when these institutions need to maintain their financial balance and economic health and well-being.
The Patient Safety Act is one that ought to be carefully looked at. I don’t know if it could be able to be implemented in this environment without some serious damage done to healthcare employment, particularly in our major hospitals, in all hospitals and for that reason, I’m concerned about it.
I’m familiar with the Hospitals Profit Transparency and Fairness Act because I chair the state’s pension board. I’m an opponent of extravagant compensation. I would join most citizens of Massachusetts in opposing that. Healthcare is a cause of the Commonwealth, and it is for everyone. Institutions that deliver healthcare are using taxpayer dollars in a very significant way, whether it’s state dollars or federal dollars, so it is a valid initiative. By requiring hospitals to be far more transparent, it will require them to limit compensation and claw back excess profits, to make sure that taxpayer dollars are used to provide safe patient care and necessary services. That’s a ballot question that I have no doubt will pass and represents good common sense.
Williams: What have you learned in your business and government career that will be especially useful as Governor?
Grossman: The most important issue we face, if you were to have a roundtable of citizens on the call, is jobs and economic security, broadly and widely shared. Too many regions of the state have been left out and left behind, too many communities have been left out and left behind. To the best of my knowledge, I’m the only Democrat running for Governor who has spent a lifetime creating jobs in the private sector. I have a track record, a long track record of 35 years. I took that successful track record into the Treasurer’s Office. Because of that, I understood that small businesses, which are the backbone of our economy, needed help. Help meant access to capital, and access to capital meant a small business banking partnership that’s poured over $350 million into business loans all over the state.
What I have learned in business and in my government career as State Treasurer is that job creation, while complicated, is about investing wisely and about creating incentives that will make it easier for businesses – including businesses that are owned by women, people of color, immigrants and veterans – to flourish.
What I have learned in my business career, and in my government career as a State Treasurer, is that hiring the best people for every job is an essential ingredient to successfully delivering services, whether it’s to customers or the 6.7 million people who live in the state who are also customers. If you give your customers great service, quality, value, and professionalism, you’re going to flourish.
When I was sworn in as a Treasurer, I said two things. I said, first of all, I’m going to hire the best person I can find for every job. Second, employment within Treasury is going to reflect the diversity of the society in which we live. If we truly want to be a society that leaves no one behind, we have to give people economic opportunity, and that’s jobs. That’s opportunities for businesses to grow and develop and flourish.
In my company, in my family business, we had a union shop for 62 years. We had earned sick times for more than 25 years. I don’t come to these issues just in the campaign because they’re popular. I come to them as a matter of our values and a sense as to what builds great organizations. So, treating workers and colleagues by providing them great benefits, by providing them with workforce training. We were one of the first companies that offered interest free loans for our employees to purchase a home. When they worked for other company for a certain period of time, they were able to get that loan discharged in its entirety.
These are practices that I think create empowerment on the part of working people. Working with people who believe that you are willing to invest in them are going to invest in you. It’s a win-win partnership that I’ve created in my own business, that I’ve created at Treasury, and that will be useful as Governor.
Finally, I’ll just share with you a quick anecdote. When I was chairman of the Democratic National Committee in 1997, I was sitting in Philadelphia one day with Bill Clinton. We were waiting for the Mayor and he was a little bit late, and so I looked at the President and I asked him a question. I said, “Mr. President, what’s the most important thing you’re trying to accomplish as president of the United States?” And he said, “Steve, I’m in the solutions business.”
I never forgot that conversation because fundamentally, in business, in politics, in my non-profit work and now as State Treasurer, I’ve been in the solutions business all my life. If you see that as your number one responsibility, I think you will be well-served, and will serve well, the people of Massachusetts. Solutions, business, leadership, all bound up together in solving common problems that improve the quality of people’s lives.
Williams: Steve, much of the emphasis in healthcare reform is on adult patients. Do you think there’s a need for a specific focus on children’s health?
Grossman: Absolutely. I would take it both specifically around health and then specifically around other investments that will also improve the quality of children’s health.
Let me focus on the issue of emotional health and well-being of our kids. Massachusetts is a national leader in screening children for behavioral health issues. Now, whether the children are getting the care they need once they’ve been screened, that’s another question, and it’s worthy of a lot of time, effort, and attention.
Back in 2007, when the federal court mandated a new program for annual checkups for the children and young adults of Massachusetts by Mass Health by the Medicaid program, we moved forward and implemented it. Its numbers are something like 70% of Massachusetts children under six in low-income families were screened by 2011 and 2012. That’s more than double the rate in the United States as a whole.
That’s a good thing. Without diagnosis, you don’t get treatment. Making sure that we actually deliver the treatment is a critical ingredient here. That is one of the things that we should focus on. If they don’t catch issues early, they become crises. They become more difficult to manage. They result in more heavy-duty medications that children may not really need. Once the federal judge ruled that we had failed to provide early diagnosis and treatment for poor children of mental illness, our aggressiveness [in Massachusetts] moved us significantly forward.
More broadly, I take a holistic approach to children’s health. It’s about their physical health, their mental health, and it’s about their education. I’m a big believer in universal pre-K, and all four year-olds having an opportunity to learn to read by the time they are in the third grade. We’ve been leaving something on the order of 25,000 kids out of that currently. I think it’s a huge dividend in terms of their ability to read fluently by the time they finished the third grade, by the time they’re eight years old.
As our children become far more proficient in reading, it will improve their ability to learn longer term. It will make them far more effective members of the workforce eventually, whether it’s after high school, voc/tech schools, or four-year degrees or whatever. By providing young people with the kind of educational skills that they need, it will have a very positive impact on their emotional health and well-being long term.
Finally, it’s true that more broadly spoken, Massachusetts has unfortunately cut its investment in mental health, behavioral health and substance abuse programs dramatically since 2009. The instability of the family unit – substance abuse being a factor in so many families – hurts the health of children; their physical health, the mental health – and could result in much higher level of domestic violence. That of course is a key ingredient in keeping children safe
I’ve worked closely with colleagues to understand how to deal effectively with the autism spectrum. As more resources are invested in research, and more resources are spent, not just financial resources but human resources in understanding how to deal with children on the autism spectrum, we will have a really positive impact on those children who are on that spectrum. My colleague, Barbara L’Italien who is our director of Government Affairs, was both the architect of and still chairs the Autism Commission. That’s an important issue for us to focus on, and we got more work to be done in that area.
Finally, we’ve got a crisis in Massachusetts. The crisis is in primary care physicians. We talked to people in rural communities and our gateway communities and there aren’t enough primary care physicians. There aren’t enough nurse practitioners for that matter.
Longer term, we need to think about how do we incentivize graduates of medical school to go into a rural area or to a gateway community. I would suggest that we create an initiative that looks a little bit like Teach for America, but it’s a five-year program in public service. A graduate of medical school, who may be lugging around debt – something on the order to $200,000 to $250,000 – is told: “look, you go to an area of the state which is hurting for primary care and we will, if you stay five years, we will wipe out your debt.”
Taxpayers investing in doctors who will serve them well and will improve the quality of primary care. I’m including the nurse practitioners and others who don’t have medical degrees, but can be enormously valuable in terms of improving the quality of healthcare, not just on adult patients, but on all patients. Pediatric primary care physicians are probably on that same spectrum. They are endangered species in some communities and we need to deal with that.
Williams: Steve, I appreciate very much your answering all the questions I’ve laid out here. I want to give you an opportunity in case there are other topics that I haven’t asked you about, if there’s anything else you’d like to add.
Grossman: We have enormous disparities in terms of income and economic circumstances. Everybody’s aware of that as a topic of conversation almost on a daily basis. When it comes to healthcare, I think we have the same disparities. Rather than only focusing on income and economic disparity, we should talk in the same conversation about healthcare disparities. If you’re not healthy, nothing else is possible. If you have your health, then everything is possible.
Seventy-seven years ago, in the middle of the worst economic times in decades, at the Second Inaugural, Franklin Roosevelt said: “The test of our progress is not whether we add more to the abundance of those who have much, but if we provide enough for those who have too little.” He was talking about jobs, education, healthcare, hope, and dignity.
We’ve done an extraordinary job at covering the vast majority of people in Massachusetts, particularly children. As we grapple with wrapping our arms around healthcare cost and cost containment, we need to make sure that those communities and those citizens who live in older industrial cities – neighborhoods in Boston even and also rural areas – have a level playing field. Leveling the playing field and leaving no one behind in terms of healthcare access and quality is a hugely important issue.
I appreciate the chance to have this conversation with you.
Williams: Steve Grossman, Treasurer of Massachusetts and candidate for governor. Thank you very much.
Grossman: David, thank you and I hope we’ll talk again.March 11, 2014