OK, congratulations to Massachusetts’ legislators and governor for creating the nation’s first potentially viable universal coverage program. While everyone is busy congratulating each other, (free registration required) I hate to be the one to harsh their mellow. But so I shall.
I’ve read numerous reports of the new program, but nowhere have I seen any reference to any aspect of the program that convinces me it will work over the long haul. Why not?
There don’t appear to be any cost-control mechanisms, price or fee or utilization or frequency controls, nor any constraints on supply.
Yes, the program should eliminate excessive costs in the system due to cost-shifting, as long as the fees paid by all payers are high enough to cover associated costs. And, with cost-shifting accounting for about $1000 of the average family’s annual health insurance premium, the savings should be significant.
But that’s it. I’m afraid Massachusetts’ noble efforts have built a giant new demand mechanism, one that will produce healthier people, a one-time drop in premiums due to elimination of cost shifting (fingers crossed on that one), and ever-higher costs for the state’s citizens.
If we are relying on private industry’s innovators to come up with a solution, one that will effectively hold down costs over the long term for the entire population, we may have a long wait. For there are few incentives and lots of risks for any insurer to develop bold new programs when all they have to do is out-market their competition to capture their slice of the Mass pie. And there certainly has been ample opportunity for private companies to develop and deliver new programs over the past two decades, programs that could successfully constrain costs. That just hasn’t happened.
I hope I’m wrong, I hope I’m wrong, I hope I’m wrong.
But if I’m not, naysayers will have another example of an “experiment” that did not work out, an example they can, and will, point to as an image of another failed attempt by government to solve a huge problem.
The reality is government did not do too much, but rather did not go far enough.
Apr
6
As usual, government wants to be nice but does NOT EVER want to say no; no to unnecessary surgical procedures, no to unnecessary imaging; no to unnecessary drugs–and labs–and no to rapacious, entrepreneurial physicians and hospital administrators. Let’s not EVER tell anyone that they can’t have something; it might injure their psyche.
Why do people always believe that the aggregation of more lives is a solution? It reminds me of an old Aggie joke (in other regions, this would have other objects). The Aggie in question was losing money on every transaction–but that was okay; he planned to make it up on VOLUME.
A worthy attempt that will certainly increase the healthcare available to many in Massachusetts. Knowing Massachusetts, I don’t think they’ll have a problem with regulating prices when it comes to that, but they SHOULD have thought about that earlier.
Wanna decrease the cost of medical care? Have the state arrange for free tuition for doctors who meet certain academic standards. Have the state purchase MRI machines and offer training in the conduct of those and other lab work. Increased competition will drive the price down..
Cost-control mechanisms? Who needs cost-control mechanisms when the government is paying for it! Don’t you get it – free health care for everyone! That’s the message – the only message – such state-sponsored insurance schemes will give and want to give.
First, I love the redesign, the site is a lot more attractive now.
Anyway, I totally agree with you on all points. They’ve done nothing to resolve the underlying structural problem with the healthcare system. I’m sure you’ve read Matthew Holt’s (and others’) take on it, which is that maybe the government will step in and sort the whole mess out in a reasonable way… but I just can’t help but think that a system where some people are covered by Medicaid, others by Medicare, and still others by a mishmash of commercial payers will still have the problems we all know about.
It is good in that everybody will have insurance now, but it certainly won’t reduce costs. It’s reassuring to see I’m not in left-field on this. But also not reassuring because I feel almost certain that your prediction of people blaming government for trying to fix the problem and universal care being put off even further into the future will come true.
If the goal of the MA plan is to reduce health care costs, then of course it will fail.
Health care costs are going up, IMO, because the US population is aging, and the demand is increasing. Nothing is going to fix that problem until the supply, i.e. the number of doctors, hospitals, nurses etc. dramatically increases.
But if the goal is to provide a short term decrease in government spending on health care, or reduce health insurance costs it should work fine, as long as the mandate to purchase health insurance is enforced.
That is what remains to be seen.
If you want to reduce health care costs, than we have to either force Americans to become healthier, so demand decreases, or start rationing medicine more to the sick and elderly, and decrease demand that way. The alternative is to build more hosptials and train more doctors, nurses, and technicians to increase the supply
Marc,
I wish it were simply that simple…
I think we can all agree – Americans will not become healthier. Rationing medicine would cause riots. And I think you could be right – there may be a short term solution to the state spending on health care in Ma.
However, I strongly disagree – increasing the number of doc’s, nurses, EMT’s, lab techs, x-ray techs, phlebotomists, pharmacists, etc, etc, etc – Might actually make healthcare cost more.
If it were possible to somehow whip all of the above (and more) up can you tell me exactly how the increase in the availability of those services and practioners and facilities would drive the costs down?
Or, would people utilize those services more?
Lets just look at nurses… There are millions of nurses. Generally speaking, patients that are admitted as an in patient in a hospital do so because of the nursing care. Is there a nursing shortage now? Was there one 20 years ago? Or is there a “man made” nursing shortage? What is the mean average age of all registered nurses in the state where you live? Why is that average age so high? If there is a “shortage” now – where will we find all the new nurses for the new hospitals? One other question. If we have more nurses and docs and techs – how will we reimburse them? I mean if there are nurses making $20/hour somewhere and then you double or triple the number of nurses – could we expect them to take a 50 or 75 percent pay cut because there are now 2 or 3 times more of them? Would the hospitals stay in business simply because there were more hospitals to compete with?
Marc – it isn’t that simple. I don’t have the solution and I don’t know anyone who does. The aging population and the increase in demand are only two spokes in a wheel made of a million other spokes.
“…”The present average age of employed registered nurses is 43.3 years…”
http://www.nln.org/aboutnln/news_tricouncil2.htm
“…The average age of a nurse today is in her 40s….”
http://www.palmbeachpost.com/politics/content/local_news/epaper/2006/04/06/s1b_brnurse_0406.html
“…The average age of registered nurses in 2010 will be over 50…”
http://www.emu.edu/news/index.php/345
“…the average age of a nurse in the state is 47….”
http://www.pressconnects.com/apps/pbcs.dll/article?AID=/20060322/NEWS01/603220316/1006
“…In March 2004, the average age of the RN population was estimated to be 46.8 years…”
http://bhpr.hrsa.gov/healthworkforce/reports/rnpopulation/preliminaryfindings.htm