massachusetts

[Azazello1313]

WSJ

 

Natural experiments are rare in politics, but few are as instructive as the prototype for ObamaCare that Massachusetts set in motion in 2006. The bills for "universal coverage" are now coming due, and it appears the state political class is prepared to do lasting damage to one of America's top-flight health-care systems.

 

Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care. State regulators already have the power to cap insurance premiums, which Mr. Patrick is activating. He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers. Those that are deemed too high "shall be presumptively disapproved."

 

Mr. Patrick ad-libbed that he had "a whole bunch of pals here who are in the health-care field, and I saw the color drain out of their faces." Little wonder. The administered prices of Medicare and Medicaid already shift costs to private patients while below-cost reimbursement creates balance-sheet havoc among providers. Now the governor wants to import these distortions to save the state's heavily subsidized insurance program as costs explode.

 

It doesn't even count as an irony that former Governor Mitt Romney (like President Obama) sold this plan as a way to control spending. As with all new entitlements, the rolling cost crisis began almost immediately. For fiscal 2010 taxpayer costs are $47 million over budget, in part due to the recession, and while the $913 million Mr. Patrick requested for 2011 is a 5% increase over 2010, spending has grown on average 6.7% per year.

 

Meanwhile, average Massachusetts insurance premiums are now the highest in the nation. Since 2006, they've climbed at an annual rate of 30% in the individual market. Small business costs have increased by 5.8%. Per capita health spending in Massachusetts is now 27% higher than the national average, and 15% higher even after adjusting for local wages and academic research grants. The growth rate is faster too.

 

Those data come from granular studies about the Massachusetts health markets published recently by the state. Not that anyone on Beacon Hill seems to have to read them, judging by their policy proposals. Besides Mr. Patrick's latest inspiration, last year a blue-ribbon commission endorsed a "global budget"—i.e., an arbitrary government limit on medical spending, with politics shaping what gets covered and what doesn't.

 

As in Washington, the political class and providers blame insurers, but a better culprit is the state's insurance regulation. Incredibly, the average "medical loss ratio" in Massachusetts for individual policies is 112%—that is, insurers pay $1.12 in benefits for every $1 in premiums.

 

This is the direct result of forcing insurers to charge everyone more or less the same rate regardless of age or health status, which makes it rational for people to wait to enroll until they need expensive coverage. It is also the result of the state's decision to merge the individual and small-group insurance markets, which transfers individual costs onto small businesses. Mr. Patrick actually justified his plan by citing small-business costs.

 

Another reason costs are so high is that state regulations have mandated that insurance coverage be far richer than the rest of the country. The average insurance deductible is 28% lower than the U.S. average, and the benefits are more generous with less cost-sharing. Patients are thus insensitive to the cost of care.

 

The insurance industry points the finger back at providers, given that over the entire Massachusetts market they usually spend 88 cents of every premium dollar on claims. But the Bay State medical system isn't wasteful by any of the fashionable measures. The Dartmouth Atlas that measures regional variation in the supposed "overuse" of care ranks the state near the U.S. middle.

 

Though some large hospital systems, especially in Boston, have the market power to drive prices higher, the state's own reports mainly show that the dominant reason health costs are rising is medical progress and technological innovation. Massachusetts health care, with its abundance of academic medical centers and high-quality specialists, is the envy of the world.

 

This is the true target of Mr. Patrick's price controls: The goal is to engineer a cheaper system through brute force so government can pay for health care for all. What inevitably suffers is the quality of care for individual patients. Thirty states imposed hospital rate setting in the 1970s and 1980s. Except for Maryland, every one of them eventually eliminated it—including Massachusetts, in 1991—partly because it didn't control costs.

 

And partly because it killed people. A 1988 study in the Journal of New England Medicine found that the states with the most stringent rate-setting had mortality rates 6% to 10% higher than those that didn't.

 

All of this is merely a preview of what the entire country will face if Democrats succeed with their plan to pound ObamaCare into law in anything like its current form. Massachusetts is teaching the country a valuable lesson in how not to reform health care, if only anyone would pay attention.

Edited March 2, 2010 by Azazello1313

[driveby]

From the department of the obvious.

[dmarc117]

once again......

 

be free to eat whatever you want, smoke whatever you want, drink whatever you want.

 

but pay for your own healthcare then!!!!!!

 

dont make those of us that do take care of ourselves pay!!!!!!

[TimC]

There is stupid and then there is Massachusetts stupid.

[westvirginia]

And again, you will NEVER control costs as long as the consumers of HC are separate from the payment.

[Perchoutofwater]

Where are those that support state run health care? It still amazes me that anyone can even try to defend the current health care bill. It amazes me that everyone is not calling their representatives and senators letting them know their displeasure over the current health care debacle. Some will blindly follow Obama to oblivion. I really do hope there are enough "obstructionists" to put a stop to this before we do irrevocable harm to our economy.

[gbpfan1231]

I admit I am sometimes naive but one thing I can't get my arms around (well I guess more than one - women in WI are big) is - if this current HC bill is SOOO bad how can certain people like Obama, Pelosi, Reid seriously want to do it? I find it hard to believe that if it is such a slam dunk that this is a bad idea that people would conciously harm the american people? What am I missing?

[Perchoutofwater]

I admit I am sometimes naive but one thing I can't get my arms around (well I guess more than one - women in WI are big) is - if this current HC bill is SOOO bad how can certain people like Obama, Pelosi, Reid seriously want to do it? I find it hard to believe that if it is such a slam dunk that this is a bad idea that people would conciously harm the american people? What am I missing?

 

This is just my opinion, but I think they know the current bill sucks, but that it is the start of a new entitlement program. They know that by passing it they can increase the size and scope of federal government. They know that rarely once an entitlement is in place that it is ever done away with. I think their thinking is we can pass this now. We know it is a turd, but we can refine it in coming years once we've widened the entitlement class.

[CaP'N GRuNGe]

I guess that means all the righties here won't be voting for Romney in 2012.

[Duchess Jack]

I admit I am sometimes naive but one thing I can't get my arms around (well I guess more than one - women in WI are big) is - if this current HC bill is SOOO bad how can certain people like Obama, Pelosi, Reid seriously want to do it? I find it hard to believe that if it is such a slam dunk that this is a bad idea that people would conciously harm the american people? What am I missing?

Good question. I am no fan of the left's leadership - but I have to believe they mean well - whether or not they have the right or a good idea. I cannot accept the idea that they are doing simply to create a new and larger entitlement class.

[Perchoutofwater]

Good question. I am no fan of the left's leadership - but I have to believe they mean well - whether or not they have the right or a good idea. I cannot accept the idea that they are doing simply to create a new and larger entitlement class.

 

Based on what you know of the bill, do you think it should pass, and if so why?

[Duchess Jack]

Based on what you know of the bill, do you think it should pass, and if so why?

 

To be completely honest, I haven't read too much into the bill. I do believe that we have a broken system that needs to be fixed and I do believe that the left has already made many concessions to the right. Does that make them right? No, but it does make them seem more reasonable and I am more closely aligned with the lefts ideals, if not their methods.

[Kid Cid]

This is just my opinion, but I think they know the current bill sucks, but that it is the start of a new entitlement program. They know that by passing it they can increase the size and scope of federal government. They know that rarely once an entitlement is in place that it is ever done away with. I think their thinking is we can pass this now. We know it is a turd, but we can refine it in coming years once we've widened the entitlement class.

You're stuck in a box of your own making perch. It is not a case of adding another entitlement. It really does stem from a desire to have affordable health care available to everyone. In their heads, since the private market is incapable of taking care of everyone, then the government must step in to fill that gap.

 

From the insurers side, there are clearly cases where it is not cost effective to insure everyone. There are some cases that they can never make their money back on. Conceptually, that is an antithesis to a society that espouses a caring, nurturing view of it's people. In the long run though, even the most caring, god loving, church going folk won't reach out a hand, or in this case, several dollars to help those in need of health care. Therefore, the government must step in, or so the thinking goes.

 

The reality of it all is that the health care system and by extension the insurance system is broken. As long as we continue to prop up a broken system, all our step will continue to fail. Health care should not be job dependent and people should have to pay out of pocket for routine visits. In fact, I would go so far as to posit that office visits should not be covered by insurance and only emergency and hospital care be covered by insurance. Make it so that Hayzeus and his family showing up at the emergency room for the sniffles wouldn't be covered. A broken arm, a gunshot wound, lacerations from the window you fell through, those are covered. Then there is the whole world of prescription medication that would need to be addressed.

 

However, no matter what gets done or doesn't get done, it is all about keeping the money flowing to those that are currently getting it. It really is no different than the BCS. Our government officials all but state it in the words that say, I'll vote for anything as long as I continue to get paid, which means that Big Insurance and Big spam continue to profit.

 

Edit to fix spam being in the spam filter

Edited March 2, 2010 by Kid Cid

[Azazello1313]

You're stuck in a box of your own making perch. It is not a case of adding another entitlement. It really does stem from a desire to have affordable health care available to everyone. In their heads, since the private market is incapable of taking care of everyone, then the government must step in to fill that gap.

 

tomayto, tomahto. what precisely is the difference between "government stepping in to fill the gap" and "adding another entitlement"?

 

I think perch is largely correct, that the main issue for the dems is to get something passed. both because they feel like it can be tweaked/expanded later (and perch is right that new entitlements never get pared back), and because they feel like they've staked so much personally, they have to get a bill past the goal line.

 

ultimately, there are two approaches that can ever hope to have any meaningful impact on health care costs in this country. either the government takes more control by setting prices and deciding which procedures are worth getting in which circumstances, or individuals begin to pay for a larger fraction of the medical procedures that they consume. the democrats are obviously strong advocates of the first approach, so they are trying to push the law as far as they can in that direction while they have the opportunity to do so.

[Perchoutofwater]

To be completely honest, I haven't read too much into the bill. I do believe that we have a broken system that needs to be fixed and I do believe that the left has already made many concessions to the right. Does that make them right? No, but it does make them seem more reasonable and I am more closely aligned with the lefts ideals, if not their methods.

 

What concessions has the left made to the right? I can think of only one, and they made that to the American people more so than to the right, as it was polling very poorly.

[i_am_the_swammi]

pay for your own healthcare then!!!!!!

 

dont make those of us that do take care of ourselves pay!!!!!!

 

I educated myself, and educate my children...why does a portion of my taxes go towards underpriviledged schools?

 

I maintain my car, and never drink and drive...why are my auto premiums adjusted higher to reflect potential accidents that are caused by others with higher risk vehicles, or those that drink and drive and that may be more likely to get in a car accident?

 

I am not a drug addict....why do some of my taxes go towards rehab programs?

 

I am not a criminal, yet my taxes pay to rehab criminals I have no need or desire to have rehabilitated.

 

Why do I do all this? Because I live in a society, am part of the greatest nation on earth, and am proud of it. There are millions of people not abusing the system that need our help. I am willing to do my part, and if it means I pay a little more for my premiums so some underprivilidged kids can get the care they need....then so be it.

 

I guess its just a difference in philosophy between how we think, and we'll never be in agreement. Maybe thats why there is such an us/them mentality in Washington.

[bpwallace49]

What concessions has the left made to the right? I can think of only one, and they made that to the American people more so than to the right, as it was polling very poorly.

 

Perch here is where your partisanship starts shining through . . . shouldnt the pols be more concerned about content over the overall cost containment versus "what concessions the left made to the right"? Who gives a good goddam? NEITHER party appears to care about cost containmnet and reducing rapidly escalating costs which was SUPPOSED to be part of this whole frackin exercise in the first place. But you keep on worrying about what hand gives the other . . but dont mind the man-meat being shoved in your rear.

 

But the smoke and mirror politicans (and the people that follow them Perch . . hint hint) care more about talking points and concessions than having the balls to take on the actual underlying problems and talk about solutions.

 

WV . . thats it. I am hopping on your libertarian bandwagon. F this partisan noise . . . .

[Duchess Jack]

Perch here is where your partisanship starts shining through . . . shouldnt the pols be more concerned about content over the overall cost containment versus "what concessions the left made to the right"? Who gives a good goddam? NEITHER party appears to care about cost containmnet and reducing rapidly escalating costs which was SUPPOSED to be part of this whole frackin exercise in the first place. But you keep on worrying about what hand gives the other . . but dont mind the man-meat being shoved in your rear.

 

But the smoke and mirror politicans (and the people that follow them Perch . . hint hint) care more about talking points and concessions than having the balls to take on the actual underlying problems and talk about solutions.

 

WV . . thats it. I am hopping on your libertarian bandwagon. F this partisan noise . . . .

 

concessions would at least show that people are working together and that they are - at least in part - listening to each other, because neither side has 100% of the answer.

 

his post in in response to my assertion that the laft has made concessions.. I read a decent list in the last couple months and am currently looking to see if I can locate it again.

[Kid Cid]

tomayto, tomahto. what precisely is the difference between "government stepping in to fill the gap" and "adding another entitlement"?

 

Perception?

 

I don't believe that the major focus of the Democrats trying to pass this health care bill is to add entitlements. While the end result may very well be a new entitlement, it is not the motivation. When someone says that to add a new entitlement is the goal of this legislation, that sounds like spin in order to paint one side or the other as the baddies. It just continues to perpetuate the Us v Them mentality that is ruining this country IMO.

[Azazello1313]

Perception?

 

I don't believe that the major focus of the Democrats trying to pass this health care bill is to add entitlements. While the end result may very well be a new entitlement, it is not the motivation. When someone says that to add a new entitlement is the goal of this legislation, that sounds like spin in order to paint one side or the other as the baddies. It just continues to perpetuate the Us v Them mentality that is ruining this country IMO.

 

so you're saying it's up to perch to paint policies he opposes in the most palate-pleasing semantic light? and if he doesn't he's ruining the country?

 

in any case, I think calling it an entitlement is absolutely factually relevant, given the one-way history of other entitlements in this country (and of course, the fact that the bill DOES create a new entitlement). the people pushing this bill know that history as well as anyone, which is a big reason why they are desperate to get something, anything, passed while they can. and that was the question which was asked. perch is kind of getting piled on today, and with respect to that particular answer he gave, I think it is entirely unfair.

[Yukon Cornelius]

Big Insurance and Big spam continue to profit.

[dmarc117]

I maintain my car, and never drink and drive...why are my auto premiums adjusted higher to reflect potential accidents that are caused by others with higher risk vehicles, or those that drink and drive and that may be more likely to get in a car accident?

 

and if you are a bad driver, you pay more!! thats my point. if you lead an unhealthy lifestyle, you should pay more, bottom line.

Edited March 2, 2010 by dmarc117

[i_am_the_swammi]

and if you are a bad driver, you pay more!! thats my point. if you lead an unhealthy lifestyle, you should pay more, bottom line.

 

I have not had an accident, or been ticketed, in over 15 years.

 

I can assure you without a doubt that, if there were no poorly maintained cars on the road that had a greater risk of failing than my well-maintained car, or if there were no bad drivers on the road, my rates would be signifiicantly less. I'd venture to say they'd be 60-70 percent less.

 

I am more than paying for the fact that other people'd driving record is significantly worse than mine. Their rates may be higher than mine....but mine would be a LOT less than if those people didn't drive at all.

 

And you now what? I can't do anything about it, and that's OK...I'll worry about things I can control.

[Ursa Majoris]

and if you are a bad driver, you pay more!! thats my point. if you lead an unhealthy lifestyle, you should pay more, bottom line.

 

And who will decide what constitutes an unhealthy lifestyle? The government that you want to shrink? Or good old trustworthy business?

[dmarc117]

And who will decide what constitutes an unhealthy lifestyle? The government that you want to shrink? Or good old trustworthy business?

 

 

have a test. make guidelines. bp, chol, sugars, weight, bmi, etc. u take the test every year. u get rated.