Join Date: Dec 2006
Location: Los Angeles
Casino cash: $7563
Here's a more thought out article on the same subject from last month's Economist. I'm sorry its not in bullet point format.
Health reform in Massachusetts, the model for Barack Obama’s version, still has a long way to go before it proves itself
AFTER the economy itself, no subject counts for more in next year’s presidential election than health care. Republicans universally detest Barack Obama’s health reforms—which, though passed last year, will not go into effect until 2014—and vow to repeal them. Yet the reforms themselves are largely modelled on a measure first tried out in Massachusetts, and signed into law in 2006 by the state’s then-governor, Mitt Romney (pictured above). Mr Romney is now the clear front-runner in the race to win the Republican nomination and face Mr Obama at the polls in 2012. Health care, in other words, could blow up in both candidates’ faces, which makes the question of whether or not the Massachusetts reforms have worked particularly interesting. The evidence is mixed.
The first point to note is that the reforms are popular in Massachusetts, and not just with the left. “No one has a problem with it,” shrugs Jim Klocke of the Greater Boston Chamber of Commerce. Sixty-three percent of residents support the law, according to the most recent poll from the Harvard School of Public Health.
This is due in part to the political climate. Benefits have long been generous in what conservatives mockingly call “Taxachusetts”. In 2004, for instance, health spending per person, at $6,683, was 27% greater than the average for all states. Insurance coverage has also long been high. At the time of the reform Massachusetts had a small population of uninsured—just 6.4%, compared with 15.8% nationally.
The reform expanded coverage even further, with an individual mandate, penalties for employers who do not offer health coverage, an expansion of Medicaid (the state/federal health programme for the poor) and subsidised insurance for adults with incomes of up to 300% of the federal poverty level. A new exchange, Mr Romney hoped, would let workers use money from their firms to buy health plans that suit them. At the signing ceremony he grinned triumphantly beside Ted Kennedy, health reform’s liberal champion.
Mr Romney left office shortly afterwards. Deval Patrick, his Democratic successor, has overseen the law’s implementation. It has plainly succeeded in its main goal of expanding health coverage. Just 1.9% of residents lacked insurance in 2010. Other data, though, are more troubling. Access to health insurance does not guarantee access to health care. One in five working-age adults say they have trouble finding a doctor who will see them. The Connector, the state’s exchange, has excelled at enrolling uninsured adults in subsidised care, but has failed to attract small businesses and their employees. As of March just 3,644 workers bought coverage on the exchange through their employers.
Costs, meanwhile, are unsustainable. Spending on MassHealth, the programme for the poor, rose 40% between 2006 and 2010. The subsidised health programme for adults was more expensive than expected—$628m in 2008 and $805m in 2009, 32% and 11% above projections respectively. This was offset in part by falling costs for a smaller cohort of uninsured, who tend to turn up for treatment at emergency rooms from which they cannot, by law, be turned away: the figure dropped from $652 billion in 2006 to $414m in 2009. But the decline was less dramatic than many hoped, says Amy Lischko, a professor at Tufts University who helped write the law. And demand from the uninsured now seems to be rising. Last year the number of uninsured hospital visits reached 800,000, 14% above the level in 2009.
For those who do have insurance, average monthly premiums rose by 12% between 2006 and 2008. True, a higher share of firms now offer coverage, but they are also shifting costs for that coverage to employees. Various factors may be to blame. Clunky regulations for the health exchange failed to prompt competition, argues Robert Moffit of the Heritage Foundation. Low reimbursement rates for MassHealth may push hospitals to shift more costs onto the privately insured. And the state’s attorney-general has found that hospitals are using their market dominance to push up prices.
The Patrick administration contends that the 2006 law was designed mainly to expand access; cost containment was meant to come later. With spending expected to double by 2020, “later” is arriving fast. But cutting costs is harder than improving coverage. Better coverage simply feeds more people into the health system. Containing spending requires turning the system on its head. After the 2006 reform Massachusetts passed a few minor provisions to lower costs. Glen Shor, the new director of the exchange, is making changes to attract more small businesses. But in the past year Mr Patrick has begun what may be America’s most aggressive effort to slash spending.
He started last year by telling his insurance commissioner to begin blocking premium increases. “It wasn’t a permanent solution,” Mr Patrick says, “but we did get everybody’s attention.” In February he presented a bill to cut costs by rejecting high premiums in the short term and transforming health payments in the longer term. Mr Obama’s reform includes similar provisions, with a plan to review premium increases above 10% and a programme to reward hospitals and doctors for providing good, inexpensive care. But Mr Patrick’s plans are more ambitious, with a powerful role for his insurance commissioner and a bolder plan to redirect most spending from fee-for-service models by 2015. State employees and MassHealth would make the shift even earlier.
The proposals have prompted strong reactions. Innovation may be stymied by price controls that distort the market, argues Michael Widmer of the Massachusetts Taxpayers Foundation. Lowell General Hospital is one of several providers that have worked with Blue Cross Blue Shield, the state’s biggest private insurer, to test a new type of payment. But Lowell’s president, Norm Deschene, worries that the governor’s prescriptive rules will thwart his efforts. “It’s a one-size-fits-all approach,” he complains.
This debate will surely escalate as legislators present their own plans to compete with Mr Patrick’s. Massachusetts has already shown that expanding access is complicated. As it struggles to rein in costs, the rest of America will be watching closely.
Homer: [looking at watch] Two hours? Why'd they build this ghost town so far away?
Lisa: Because they discovered gold over there!
Homer: It's because they're stupid, that's why. That's why everybody does everything.