...In Massachusetts's latest crisis, Governor Deval Patrick and his Democratic colleagues are starting to move down the path that government health plans always follow when spending collides with reality -- i.e., price controls. As costs continue to rise, the inevitable results are coverage restrictions and waiting periods. It was only a matter of time.
They're trying to manage the huge costs of the subsidized middle-class insurance program that is gradually swallowing the state budget. The program provides low- or no-cost coverage to about 165,000 residents, or three-fifths of the newly insured, and is budgeted at $880 million for 2010, a 7.3% single-year increase that is likely to be optimistic. The state's overall costs on health programs have increased by 42% (!) since 2006.
Like gamblers doubling down on their losses, Democrats have already hiked the fines for people who don't obtain insurance under the "individual mandate," already increased business penalties, taxed insurers and hospitals, raised premiums, and pumped up the state tobacco levy. That's still not enough money.
So earlier this year, Mr. Patrick appointed a state commission to figure out how to control costs and preserve "this grand experiment." One objective is to change the incentives for preventative care and treatments for chronic disease, but everyone says that. It sometimes results in better health but always more spending. So-called "pay for performance" financing models, on the other hand, would do away with fee for service -- but they also tend to reward process, not the better results implied.
What are the alternatives? If health planners won't accept the prices set by the marketplace -- thus putting themselves out of work -- the only other choice is limiting care via politics, much as Canada and most of Europe do today. The Patrick panel is considering one option to "exclude coverage of services of low priority/low value." Another would "limit coverage to services that produce the highest value when considering both clinical effectiveness and cost." (Guess who would determine what is high or low value? Not patients or doctors.)
Yet another is "a limitation on the total amount of money available for health care services," i.e., an overall spending cap.
The Institute for America's Future -- which is providing the intellectual horsepower (we use the term loosely) for reforms like those in Massachusetts -- argues that the cost overruns prove the state must cap how much insurers are allowed to charge consumers and regulate their profits. If Mr. Patrick doesn't get there first, that is. He reportedly told insurers and hospitals at a closed meeting this month that if they didn't take steps to hold down the rate of medical inflation, he would.
Even the single-payer cheerleaders at the New York Times have caught on to this rolling catastrophe. In a page-one story this month, the paper reported on the "expedient choice" that Mr. Romney and Democrats made to defer "until another day any serious effort to control the state's runaway health costs. . . . Those who led the 2006 effort said it would not have been feasible to enact universal coverage if the legislation had required heavy cost controls. The very stakeholders who were coaxed into the tent -- doctors, hospitals, insurers and consumer groups -- would probably have been driven into opposition by efforts to reduce their revenues and constrain their medical practices, they said."..(more)
Is this a bad time to bring up what some claim is the Canadian healthcare systems part in the death of actress Natasha Richardson?