Testimony of
B. Hoagland Rosania M.D. for
The Massachusetts Medical Society
Massachusetts Orthopaedic Association
Before the Joint Committee on Health Care Financing
In Support of Senate Bill 609

An Act Authorizing Health Care Professionals to Negotiate with Health Care Insurers
and Providing for the Powers and Duties of the Attorney General

October 17, 2007

The Massachusetts Medical Society is in strong support of Senate Bill 609, “An Act Authorizing Health Care Professionals to Negotiate with Health Care Insurers and Providing for the Powers and Duties of the Attorney General,” legislation that would allow physicians and other health care professionals to collectively negotiate with health insurers. Federal anti-trust legislation severely limits what non-employee physicians can do to have even minimal bargaining power against the large insurers that dominate the marketplace. However, this legislation would allow Massachusetts to craft an exception under the “state action” doctrine that can allow physicians and other health care professionals to come to the bargaining table as more equal partners of the big health insurers. Similar legislation has already been enacted in Texas and New Jersey.

Because they cannot bargain collectively with the large insurers, independent physicians and other health care professionals have no leverage in their “negotiations” and are typically offered contracts on a “take-it-or-leave it” basis. Since insurers are able to control the flow of patients to health care professionals through financial arrangements that strongly encourage patients to utilize only the services of professionals in their network, physicians have little choice but to accept the contractual offer of the dominant insurers in their marketplace or suffer the loss of a substantial number of their patients. The power of the major health insurers has created a competitive imbalance, reducing levels of competition and threatening the availability of high-quality health care.

This dangerous imbalance can be overcome by state legislation. Under the “state action” doctrine, states can make an affirmative decision to encourage competition by authorizing collective bargaining by the myriad of independent physicians and other professionals that are now forbidden to do so. The doctrine requires that the state take an active role in supervising the process to assure that the individuals do not engage in anti-competitive behavior that hurts consumers.

This measure would accomplish the task. It establishes a state policy to promote competition in the health care marketplace and gives the Attorney General responsibility for making sure the process works to the benefit of consumers through a two step process:

• First, before engaging in any joint negotiation with a carrier, health care professionals must obtain the Attorney General’s approval to proceed with the negotiations
• Second, no provider contract terms negotiated under this act shall be effective until the Attorney General approves the terms.

Passage of this legislation would help restore fairness for physicians and health care professionals in their negotiations with health insurers through collective bargaining.

We urge the Committee to report out this measure favorably.  

At the September meeting of the Board of Directors Martine Carroll, Senior Judge of the Department of Industrial Accidents, made a plea for more orthopaedic surgeons to volunteer to serve as Impartial Physicians in DIA cases.

Among the key points Judge Carroll explained is the control the physician has over when and if he or she would accept a case for review. Cases are assigned on a rotating basis in geographic areas and physician may decide if they are available and determine the time and dates of office visits.

Another important component of the Impartial program is that the physician be seeing patients for a minimum of eight hours per week. The DIA also has standards to be used if questions about conflicts of interest arise because of relationships with other physicians or for doctors who do Independent Medical Exams for insurance firms.

Complete details on the Impartial Physicians program can be found at the DIA website:

Mass.gov/dia

Down the left hand column is a heading: Key Resources and included in the list is Information for Impartial Physicians.

We urge all orthopaedic surgeons to consider participating in this activity.
 

By B. Hoagland Rosania MD

I would like to inform the Orthopedic Community about this celebration.

The Mass Hospital School is located in Canton, MA. and is a very unique place. It is a residential school for physically challenged children. There currently are 88 residential students and 34 day students. Orthopedic diagnoses include cerebral palsy, muscular dystrophy, spina bifida and spinal injury. Many of you rotated here when Dr. Richard Kilfoyle was chief.

The School is state supported by DPH. The Developmental Committee, on which Dr. William Sullivan, Dr. Carlton Akins (current Orthopedist on staff) and myself participate, endeavors to support quality of life issues such as improvement of buildings and grounds, new projects, trips(Disney World), recreational facilities, amenities, etc.

The School is observing the anniversary with a dinner on Monday, November 5th at the Westin Boston Waterfront Hotel. Jack Connors Jr. will receive the Arthur Pappas Award from Dr. Pappas, who currently serves as Chairman of the Board of Trustees.

You are invited to attend the dinner or simple make a contribution to the Mass Hospital School. KMC Productions is organizing the event and you may call them at 781-356-6616 for detailed information.
 

On March 21st the Task Force held a public hearing on these issues. Dr. B. Hoagland Rosania testified at that hearing as follows:

My name is Dr. Hoagland Rosania. I have been practicing orthopedic surgery in Massachusetts in a community setting since 1971. I am a Past President of the Massachusetts Orthopaedic Association (MOA) and currently active on the Executive Board. I am also a member of the Massachusetts Medical Society’s (MMS) Committee on Legislation. Today I have the honor of speaking for both organizations.

The issue of physician ownership of ASC’s and MRI’s is indeed a “hot button” issue, as evidenced by the existence of this commission, the volume of legislation filed each session and the abundance of proposed budget amendments each year.

Let me be clear: Despite claims to the contrary, physician ownership of health care facilities is good for the health care delivery system, physicians, patients and insurers. They are safe, offer high quality services, ease of scheduling, greater personal attention and lower costs.

Physicians invest in ASC’s and MRI’s for many different reasons, but mostly because it allows the physician to provide better care Ownership allows physicians to have more control over their patients surgical and imaging schedules, become more efficient with their own time and better manage the quality of their patients care.

Physicians have played a vital role in the growth and success of ASC’s and in-office imaging. Massachusetts is now questioning whether new restrictions should be imposed on physician ownership of such entities. These questions do not appear to be motivated by any evidence of abuse or conflicts of interest resulting from ownership. Instead, they are derived from interests who feel threatened by the competitive challenges that physician owned entities pose for them. I therefore will address the following issues, which I hope will assist the commission in moving forward with recommendations:

• Why the physician group practice exemption in Massachusetts must be preserved to ensure fair competition, quality of care and cost controls.
   
• Why physician ownership should be encouraged – not discouraged – and what the consequences will be if laws or regulations are changed to further restrict ownership and development.

The physician group practice exemption is a statutory protection for equipment and/or minor surgical procedures that are offered or performed as a direct extension of the physician’s office practice. Elimination of the physician group practice exemption would require any entity seeking to establish, acquire, or transfer a single or multi-specialty ASC, MRI or any other innovative service or new technology to get a DoN and be licensed as a clinic.

The physician practice exemption is the only avenue open to physicians who wish to invest in an ASC or MRI. The DoN process is closed to physician owned facilities as a matter of policy by DPH. So to require that all ASC’s and MRI’s get DoN’s and be licensed as clinics is to say that there will be no DoN’s granted to any entity that is not hospital based or affiliated.

Now the hospitals are saying “what’s wrong with that, sounds good to us.” This is what the concerns are:

• This is a patient access issue. Limiting the availability of outpatient surgical or diagnostic services will create long waiting lists and delay a patient’s access to necessary treatment. Some patients will have to travel long distances to get the services they need.
   
• From an economic perspective, restricting competition by physician owned entities is not the answer to hospitals financial woes, and will have negative consequences, including: limiting patients’ access to care, compromised quality and ultimately increased costs if only hospitals are allowed to provide these services. Giving the hospitals monopoly power over outpatient surgery or diagnostic equipment, will not lower costs, and in fact will have the exact opposite effect. Competition lowers prices and provides an incentive to improve quality.

Physician ownership should be encouraged, especially in Massachusetts.

During the past five years, the Massachusetts Medical Society has studied the adequacy of the existing physician workforce, its impact on the physician labor market, and access to health care services for the residents of Massachusetts. These studies provided data that strongly suggested severe and critical shortages in the Massachusetts physician labor market. . Additionally, the 2006 report demonstrates a steady decline in the physician practice environment over a 12 year period that has negatively impacted physicians’ willingness to continue practicing in Massachusetts.

• Among the 14 specialties analyzed in this study, the following seven have experienced long term (for the past 4-5 years) “critical to severe” labor market conditions: Anesthesiology; Cardiology; Gastroenterology; General Surgery; Neurosurgery; Orthopedics, and Radiology.
   
• Three specialties have emerged as “critical to severe” for the first time – family practice, internal medicine and psychiatry.

The reasons these shortages exist is due to a poor physician practice environment here in the Commonwealth. High malpractice insurance rates, low reimbursement, high cost of living and mounting administrative burdens all contribute to the worsening physician practice environment.

Massachusetts is having a tough time retaining the high caliber students attracted here by the world renowned teaching hospitals. They train here, but then they leave and take their skills with them. Recruiting new physicians to Massachusetts is increasingly difficult. That means that the shortages that exist now will undoubtedly get worse.

These shortages will inevitably affect patients’ access to care. Significant system reforms and collaboration from stakeholders – many of whom are sitting on this commission – are necessary to avert a future health care crisis. How can we improve the physician practice environment?

Increasing reimbursement rates, reducing the cost of malpractice insurance and administrative burdens would obviously be beneficial. But the single most important thing this body could do is a concept well known to physicians – first, do no harm!