spr09sarahiselin

Reining in Health Costs

spr09healthcostsThe making of reformer Sarah Iselin

By the latest estimates, only 2.6 percent of Massachusetts residents lack health insurance, the lowest rate of any U.S. state. “It’s amazing,” says Harvard School of Public Health (HSPH) alumna Sarah Iselin, who has been part of the state’s 2006 pioneering health care reform legislation since it began taking shape in 2005.

Now, as commissioner of the government’s Division of Health Care Finance and Policy, or DHCFP, Iselin is responsible for implementing key provisions of the law-this despite a budget deficit that in February exceeded $1.5 billion.

The ranks of the uninsured in Massachusetts have shrunk by 440,000 people, or by more than half. The state’s success in insuring nearly everyone rests on four provisions of its landmark law:

  • Individuals must purchase insurance, provided affordable insurance is available to them, or pay a penalty;
  • Employers of 11 or more workers must contribute to employees’ insurance or pay a fine;
  • Free and subsidized insurance plans are available for low-income residents;
  • New plans were created for young adults and for individual purchasers, including the self-employed.

“We have far surpassed expectations in an incredibly short period-and maintained the overwhelming support of the public, and the health care and business communities,” Iselin says.

The Making
of a Reformer:
Sarah Iselin, SM’99

1993
Graduated from the School of the Art Institute in Chicago, concentrating in photography

1994
Joined the Visiting Nurse Association of Boston as a patient care coordinator

1999
At HSPH, earned a master’s in health policy and management; did an “applied research and practice” internship in Massachusetts’s Division of Health Care Finance and Policy, which she now heads

1999-2001
Directed health care finance at the Massachusetts Hospital Association

2001-2005
As director of policy research and evaluation for the Blue Cross Blue Shield Foundation, managed “Roadmap to Coverage,” an initiative to help kick-start reform

2005-2007
Served Blue Cross Blue Shield of Massachusetts as chief of staff for the executive vice president of health care services

CRUSADER-IN-TRAINING

Iselin was raised in Washington, D.C., by parents committed to public service. Her father served Senator Carl Levin, a Michigan Democrat, as chief of staff, while her mother lobbied for nuclear disarmament. By the time Iselin was concentrating in health policy and management at HSPH, aiding the poor had become a career theme.

“While my skills come from a finance, data-driven policy perspective, I’m driven by a human, personal concern for the most vulnerable among us,” she says.

As a student of public health at Harvard, Iselin did a practicum at DHCFP, the state agency charged with improving health care financing and delivery. Ten years later, in March of 2007, she returned to lead it. DHCFP sets prices for the state Medicaid program and other government purchasers of health care services. It also conducts policy research and publishes information on health care quality and financing.

“I draw from my two years at HSPH every day, from content in classes to calling up a faculty member to think through an issue,” she says. Such support will be critical as her agency joins others in tackling the next, most challenging phase of reform: containing health costs. Ironically, Massachusetts has the highest of any U.S. state.

HUGE FUNDING GAP

Funding for health reform depends on three sources: the state’s general operating funds; federal Medicaid payments; and money the state has historically put aside for hospitals and community health centers that, by law, must provide free care to the uninsured and the poor. Use of the “free care pool” fell by 35 percent, Iselin says, making available about $250 million for health insurance subsidies. Even so, in the first year, costs of reform exceeded projections.

“Every stakeholder-consumer, insurer, hospital, employer-has been asked to pay more,” Iselin says. Yet commitment to reform remains strong, she adds, reflecting a “continued spirit of shared responsibility.”

One responsibility of Iselin’s agency is to manage the free care pool, or Health Safety Net Trust Fund. The agency also oversees the student health insurance program and the employer “fair share” component of the reform law. In 2008, DHCFP proposed to change the definition of “fair and reasonable” contributions by businesses to health insurance for their workers. As a result, employers’ contributions are expected to rise this year.

Iselin’s 105-person staff collects and analyzes information-who’s still uninsured, percentage of employers offering health insurance, cost of health care premiums and their effect on access, hospitals’ and insurers’ financial performance-and releases these “key indicators” in a quarterly report. These hard data make it possible for Governor Deval Patrick, state legislators, and others to keep a finger on the pulse of the law’s impact and recalibrate if necessary.

PEELING THE ONION

Rising costs remain the biggest threat to health reform in Massachusetts. To Iselin’s agency falls the formidable task of developing strategies for containing costs in sustainable ways. Her boss, Secretary of Health and Human Services JudyAnn Bigby, says Iselin is ideally suited to the job.

In January of 2009, Iselin began co-chairing a new commission to identify reforms that will “move us away from the fee-for-service payment system,” in which patients and providers drive the use of services, making treatment choices largely independent of their comparative effectiveness and cost-efficiency. Iselin’s agency will also develop an annual report on costs and hold public hearings to uncover ideas that help “bend the trend” of uncontrolled growth.

“We’ll peel back layers of the onion to reveal what exactly is driving health care costs,” Iselin says. Her team will also look at insurers’ reserves and hospital endowments to see how they are used and compare them to those in other states.

As President Barack Obama and a Democratic majority in Congress work to overhaul the U.S. health system, all eyes are on the Bay State. “Expanding health coverage and improving access to care was challenging,” says Iselin. “Tackling cost growth will be much harder.”

Ellen Barlow writes about science, medicine, and public health for nonprofit organizations throughout Greater Boston. Photo, Kent Dayton/HSPH