NeuroNews

Massachusetts Healthcare - Not Miracle, but Smoke and Mirrors

Polls show the large majority of the American people are happy with their healthcare.  They just think it costs too much.  Most people think pre-existing conditions and concurrent illness shouldn't prevent insurance.  Fair enough.  Those are easy fixes.

Enter the Massachusetts Health Reform Bill, touted as the solution for the country's healthcare woes.  It's had a few years for a track record, and this has been examined in papers in the New England Journal of Medicine (1, 2).  It turns out that "only about half of the more than 400,000 residents who gained coverage by December 2008 were publically subsidized."  This means that half the newly insured could have insured themselves anyway, so "the individual mandate and employer incentives have provided good value for Massachusetts taxpayers..." 

But this came at a cost, with the average price of a family insurance premium increased by more than 12%, with another 10% increase in 2009.  Maybe the cost is worth it for the public good.  That's for us all to decide, but I invite you to read this article and come to your own conclusions. http://healthcarereform.nejm.org/?p=2135

This said, a follow-up poll of doctors in Massachusetts (2) published in the same journal reported that about 70% of doctors generally supported the plan, but only 34% liked it in its current form.  In addition, 87% of the doctors polled said the bill either didn't impact or negatively impacted the amount of time they could spend with patients.  71% didn't find any impact or a negative impact in getting patients to needed referrals to other doctors.  But, fairly enough, 42% found it easier for uninsured patients to pay for care, whereas 36% found either no change or a negative impact in uninsured patients' ability to pay for care.  Again, I invite you to read the article for yourself.  There are problems with the poll, as there are with any poll, but at least the data are presented in a coherent fashion.  http://healthcarereform.nejm.org/?p=2133

Though the New England Journal of Medicine, in my opinion, devotes a large amount of space in its editorial pages advocating a single payer system, only 3% of the doctors who responded to this poll suggested that single payer be implemented.  And as for streamlining care, 78% of the respondents saw no change or a negative impact on the administrative burden of their practices by Massachusetts health care reform.  To be fair, the summary presented here differs from that of the original article, but flows directly from the data presented.  I have connected the dots a little differently from the original authors.

Now back to the first article (1).  The estimated cost of the program was forecast to jump 20% from 2008 to 2009.  With a declining economy, where do you think the money will come from to pay for that increase?  Why from the federal government, of course, with an increase in total federal participation of 43%, so that the entire program will be 70% funded with federal dollars.  There was a corresponding decrease in Massachusetts state funding of the program, from $457 million to $205 million, or a decrease in the Massachusetts general fund contribution to 11% of the total program cost.  For the people of Massachusetts, looks like a pretty good deal, as long as the money comes from the federal government.  That is from all the rest of us.  Beginning to sound a little like Senator Ben Nelson's deal for Nebraska, isn't it? Reminds one of Margaret Thatcher's famous quote about socialism, or in this case, socialized healthcare, "The problem with socialism is that you eventually run out of other people's money."    

So... as we take a look at the Massachusetts Miracle, we have to ask whether it would be good for the rest of the country.  Most everyone agrees that we need to make sure everybody has insurance.  It is clear from Massachusetts that a mandate to buy insurance and a subsidy for those who cannot afford to buy it, will do just that. 

We need to decrease costs.  To do this, I believe a major step would be to take hospitals and hospital systems out of outpatient healthcare, and allow fair competition for our outpatient healthcare dollars among those with an interest in preserving quality while increasing efficiency of outpatient care.  Hospitals are the least appropriate candidate to do this, because as I have written previously, hospitals and hospital systems charge far more for outpatient testing than outpatient health systems, because they tack on facility fees for these outpatient tests.  They have no incentive to do otherwise, and they are exempt from self-referral legislation, so their captive doctors, patients, and their insurers have to pay the extra cost. 

We need to get rid of unfair insurance practices, such as rescission or the cancellation of patients who are sick, and denial of insurance based on pre-existing conditions.  With a mandate, and a few other tweaks, we will be able to afford this change.  It is also clear that health insurance companies have undergone a major change in the last two decades.  In the early 90's, their medical loss ratio (what they pay out for patient care relative to the premiums they take in) was about 95%.  However, recently, that medical loss ratio has decreased to 80%.  Presumably, this extra money goes to increase shareholder value, executive salaries, and corporate jets, and not to better patient care.  It's pretty clear to me that some of the costs of our healthcare system could be trimmed from insurance industry "overhead" costs.

Most important in healthcare, we should adhere to the ancient maxim that doctors try to live by every day: "First, do no harm." Unfortunately, the bills before congress, in my opinion, will do a lot of harm to patients as well as the health care delivery system that serves them. 

1.  Massachusetts Health Care Reform--Near-Universal Coverage at What Cost? by Weissman and Bigby, MEJM 361;21  November 19, 2009.

2.  Physicians' Views of the Massachusetts Health Care Reform Law--A Poll  by SteelFisher et al, 10.1056/NEJM  po909841.

 by Vernon Rowe, MD