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Posted at 3:51 PM ET, 02/23/2011

'It’s got to be better than this devil-may-be marketplace'”

By Ezra Klein


A senior Patrick administration health care official said Friday that a single payer system may work more effectively and efficiently than Massachusetts’s existing insurance market, a high-profile endorsement that raised eyebrows at a legislative hearing.

“I like the market, but the more and more I stay in it, the more and more I think that maybe a single payer would be better,” said Terry Dougherty, director of MassHealth – the state-run Medicaid plan that insures nearly 1.3 million Massachusetts residents – when lawmakers asked for his “personal view” on a single payer system.

Dougherty’s comment, made during a budget hearing at the Boston Public Library, prompted his boss, Secretary of Health and Human Services JudyAnn Bigby, to interject: “That’s his personal opinion.”

Dougherty noted that MassHealth, by far the largest program in state government, spends just 1.5 percent of its $10-billion-a-year budget on administrative costs – compared to about 9.5 percent by the private market, according to studies by the state Division of Health Care Finance and Policy ... “It’s got to be better than this devil-may-be marketplace,” he said. “We don’t build big buildings. We don’t have high salaries. We don’t have a lot of marketing, which makes, to some extent, some of the things that we do easier and less costly than some things that happen in the marketplace. Overall, my point is, we have individuals who work in state government in MassHealth ... who are just as smart, just as tactile, just as creative as people who work in the private sector, but they work for a lot less money.”

By Ezra Klein  | February 23, 2011; 3:51 PM ET
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I think the most interesting statement here is that the public sector employees make less money than the private sector employees.

I think majority of Americans take this for granted as a fact.

Posted by: will12 | February 23, 2011 4:04 PM | Report abuse

Mass Health is killing Mass.and Deval knows it.

Posted by: obrier2 | February 23, 2011 4:27 PM | Report abuse

What gets me about this statement is that the Massachusetts model of health care (that the Affordable Care Act copies) ends up getting Insurers to spend only 9.5% of premiums on overhead. Compare that to the 25-30% average(and as high as 40%) in the pre-ACA world. Hell that's lower than the ACA mandated 15%. If the ACA drives overhead down at anywhere close to a similar rate it'll be a huge in driving down healthcare costs.

Posted by: Nied1 | February 23, 2011 4:33 PM | Report abuse

What does he mean by his statement that the individuals in state government are "just as tactile" as those in the private sector? They touch people a lot? Or is it that they are eminently touchable themselves? Is this some new use of the term with respect to the workforce that I have missed out on?

Posted by: JJenkins2 | February 23, 2011 4:44 PM | Report abuse

Congrats on going straight to grammar nazi and not at all contributing to the discussion.

Perhaps by 'tactile' he means able to be contacted? Unlike the voicemail hell that many corporations use to prevent you from actually talking to a human being?

Posted by: rpixley220 | February 23, 2011 5:06 PM | Report abuse

@rpixley220: I wasn't trying to be a grammar nazi: I truly did not understand the reference, an important one if he was trying to underscore the value of the public sector worker.

As for not contributing, you're right. I wholly concur with Mr. Dougherty's sentiments regarding the benefits of a potential single-payer system, and for the reasons he states. So there is little for me to add.

Posted by: JJenkins2 | February 23, 2011 5:52 PM | Report abuse

So Wisconsin, IN, OH, MI, and others (I guess don't forget NJ) are all saying that they have all these problems with employee costs especially due to health care costs. The answer must be to gut the unions!! But all of these "R" governors were/are against any health care program by the fed's, especially such as even considering single payer, that would best address that problem. The hypocrisy of the republican party is overwhelmed only by that of the press that seems to feel that they can't call them on it, because they all know in their minds the feckless Dem's are just as bad. Just he says / she says and write it up, even though they generally know the real facts.

Posted by: prairiedaag | February 23, 2011 6:50 PM | Report abuse

You do your best to keep your children healthy, but sickness and accidents are a part of life. Getting health insurance for your children gives you peace of mind knowing they have health coverage when they need it. Search one the web "Wise Health Insurance" for kids they are the best.

Posted by: cornlius | February 24, 2011 4:47 AM | Report abuse

@obrier2, I live in Massachusetts, am fairly well attuned to politics and I pay attention. This is the first time I've ever heard somebody say anything along the lines of "Mass Health is killing Mass."

Can you elaborate? Why do you say that?

Posted by: dcsohl | February 24, 2011 8:51 AM | Report abuse

@cornlius: Thank you for illustrating the point! Public health care won't have the need for such silly marketing overhead as paying you. Costs cut, spam cut, right from here! What's not to like?

Posted by: Traipser | February 24, 2011 9:00 AM | Report abuse

There is no free market in healthcare (or health insurance). Let's see, what are the four types of market failure, 1. inequality of information 2. non-competitive market , 3. has market externalities affecting third parties, 4. involves public good.

Healthcare is unique in that its always at least ones and sometimes all four types of market failures at once. Inevitably, the existing Medicare system will improve its benefits and drop its eligibility age from 65 to birth. But the institutional snag holding this up is, as a government program, Medicare isn't allowed to use the money it collects to write checks to fund political campaigns. On the other hand, private insurers are not similarly constrained, and they spend much money buying political cooperation. That's the reason we have, as President Obama put it when he blew healthcare reform, "a uniquely American system".

Posted by: beowulf_ | February 24, 2011 2:57 PM | Report abuse

Most states would do well to follow the TennCare model which was "not financially viable" until 190,000 enrolled members were dropped from coverage.

Can anyone tell me even one private insurance company that just dropped 190,000 members. Only the government could get away with that.

Posted by: kingstu01 | February 25, 2011 12:43 PM | Report abuse

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