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Good News Out of Massachusetts

In 2006, Massachusetts passed a big health-care reform bill. The structure of it was actually pretty similar to what we're seeing nationally. And, like what we're seeing nationally, it didn't have much in the way of cost controls. But nor did it promise to. The short-term priority, officials said, was getting coverage to everyone. The long-term priority was cost control. And the two would work together.

After all, without cost controls, subsidizing health-care coverage would become unaffordable, and Massachusetts would have to abandon the reforms it had worked so hard to pass. Without cost control, there could be no universal health-care system. That would focus the mind, they predicted. That would help them make the hard decisions.

This theory made some sense, but it was never clear if it would actually amount to anything. But now Massachusetts is trying to move away from fee-for-service medicine, and towards a payment system that doesn't push doctors to maximize their income by maximizing their treatments.

That's a huge reform. Much bigger than anything we're considering nationally. It's a direct attempt to change the behavior of politically powerful providers to preserve the coverage that the reforms gave to individuals. It will be difficult. The doctors' lobby is already giving angry quotes to the press. But the vote on the commission was unanimous. And the members of the commission felt it was necessary. After all, the only choices before them were going forward on reform and going backward. The status quo was no longer an option. That wasn't been true before reform. But it's true now.

By Ezra Klein  |  July 17, 2009; 6:42 PM ET
Categories:  Health Reform  
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Comments

So once the Government has responsibility for all healthcare costs it will be entirely justifiable for them to install telescreens in everyone's bedrooms. And it will also be incredibly reasonable and enlightened for them to strictly regulate the diets of all individuals.

Lets run up huge deficits so we can use those deficits as an excuse to reduce individual freedoms. Brilliant!!!!

Posted by: fallsmeadjc | July 17, 2009 11:51 PM | Report abuse

Yeah, but...

The health care politics in Massachusetts are somewhat different than the rest of the country. Most of the key political power is concentrated in a few health systems, such as Partners (Harvard hospital system), Tufts and a few others. These are systems that are prepared to accept the proposed changes as they are consistent with their current business model. More importantly, they're all looking to expand, and what better way to go after suburban and exurban medical communities that don't have systems or experience in place for the "new" health care model? Its a clear expansion opportunity for those that already have integrated health networks (the 90's term for accountable care organizations, btw, these aren't new concepts) established. Nationally, the key power lies with medical specialty associations, not a couple of academic medical centers. Those associations know that most of their members are ill-equipped for this type of change, and when docs understand the real implication (loss of autonomy as they move from owner to employee) the opposition will be a lot stronger than in Massachusetts.

Posted by: wisewon | July 18, 2009 7:37 AM | Report abuse

Why do you care how doctors are paid?

So, we get rid of the insurance company but the renamed HMO, steps in to deny treatment, and cherry pick healthy subscribers -performing the same function the insurance company did. This is better for patients how?

Once the doctors are on salary, why wouldn't their employer want them to over-treat to run up their corporate profits?

Also, why do you say American medical results are poorer, when we all know that is not true. We live longer here, correcting for our murder and accident rates. Everyone knows this, so why do you keep repeating it?

Posted by: ChristopherGeorge | July 18, 2009 2:59 PM | Report abuse

"Politically powerful providers"!

That's a lot of alliteration!

Posted by: jogoldbe | July 18, 2009 3:24 PM | Report abuse

fallsmeadjc -- the whole idea of health reform is that the government will provide basic coverage for whatever it chooses to cover -- and you'll be free to buy additional private insurance coverage for anything the private companies choose to allow. Where's the restriction on your freedom?

Posted by: AlanSF | July 18, 2009 6:02 PM | Report abuse

Ezra,

You act like capitation hasn't been tried before and found wanting, by both providers and patients. Guess there is nothing new under the sun.

Posted by: YanceyWard | July 18, 2009 7:01 PM | Report abuse

Ezra, have you considered that this could lead not only to denial of unnecessary tests but denial of necessary tests as well?

If you haven’t already done so, please take a look at Arnold Kling’s recent blog post…

http://econlog.econlib.org/archives/2009/07/massachusetts_h_3.html

Posted by: kingstu01 | July 18, 2009 10:01 PM | Report abuse

"Politically Powerful Providers"


Is this a joke? The AMA hasnt had a single powerful change on Congress since they blocked FDRs universal healthcare proposal in the 1940s. Ever since then, they've gotten their ass kicked on every single major political issue. They threw everything they had into trying to defeeat Medicare in the 1960s, even hiring Ronald Reagan to produce a series of TV/radio spots fighting "socialized medicine." Guess what all that work did for them? Absolutely nothing, they got rolled in Congress. Does that sound like a politically powerful lobby to you? That was 40 years ago, and if anything their lobbying power has gone down 10 fold since then.

The only reason that the doctor cuts in medicare over the last few years were rescinded was because the UBER-POWERFUL AARP lobby got on board. It had absolutely nothing to do with the AMA.

Posted by: platon201 | July 18, 2009 11:07 PM | Report abuse

For the record, the best way to handle this issue is to make doctors employees of the federal government and pay them a flat salary. I suggest 150k for primary care doctors and 250k for specialists.

The days of specialists earning 5 or 6 times what a primary care doctor makes needs to come to an end.

Posted by: platon201 | July 18, 2009 11:09 PM | Report abuse

"Also, why do you say American medical results are poorer, when we all know that is not true. We live longer here, correcting for our murder and accident rates. Everyone knows this, so why do you keep repeating it?"

Really?! That does not sound plausible to me. I did a little research and found a paper on the subject (Waigandt and Phelps, "The effects of homicides and suicides on the population longevity of the United States"). This suggests that the effect of these two phenomena on US longevity is about -0.7 of a year for the US male and about -0.25 for the US female. So lets say -0.5 for your average American. European countries which have longevity rates of 3 years more than the US such as Sweden and Switzerland have murder rates of about half the level of the states. So presumably the correction for murder would only explain 3 months of the aforesaid disparity. I haven't checked the accident rates but I don't believe for one moment that you guys are that much more accident prone - at the very most it might account for a month or two. The fact remains that you spend at least half as much again of your GDP per capita on health and get poorer outcomes.

If you are going to cite spurious "facts" that "everyone knows", please cite your sources.

As it is, I think you owe the author an apology.

Posted by: merlin8 | July 20, 2009 1:35 PM | Report abuse

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