Even though there are a bunch of details that need to be worked out, the basics of health care reform haven’t changed since June (with the exception of the public option). The bill still contains:
- New rules for insurance companies. No more denying coverage based on pre-existing conditions or dropping coverage when you get sick. An end to women being charged higher premiums and limits on variation in premiums based on a person’s age.
- Health Insurance Exchanges where people without insurance can buy coverage. Insurance plans on the exchange will be regulated to meet certain quality requirements.
- Employer requirements. Large employers must provide insurance to employees or pay a tax penalty.
- Individual Mandate: Individuals will have to buy insurance or pay a tax penalty.
- Subsidies for people who can’t afford insurance: The subsidies will be on a sliding scale based on income. Medicaid will be expanded to cover people at or just above the poverty line.
- Caps on out of pocket expenses
- New programs to reduce health care costs: Most of the text of both bills involves these new programs. It’s too early to tell which will make it into the final version, but proposals include trial programs changing the way doctors and hospitals are paid- for example, instead of getting paid per procedure, they’d get paid based on how well they treated a person’s illness overall. Another proposal is a commission that would advise Congress on ways to make Medicare more efficient.
Looking at the above list of just the basic details- ignoring for a second the fights over the public option, abortion rules, the cost of the bill, and how it will be payed for- and you can see that it’s more or less the same policy that Massachusetts passed back in 2006, when the state (err… sorry, commonwealth) developed its own version of health care reform. New rules, exchanges, employer requirements, a mandate, subsidies, caps on expenses– the Massachusetts system has all of that. Which leads to the obvious question- how well has it worked for them?
First, a quick background
Jonathan Cohn, writing in The New Republic, explains how health care reform came to Massachusetts in 2006:
It was all thanks to a fortuitous political circumstance–one that spawned an unlikely alliance between Republican Governor Mitt Romney and Democratic leaders in the legislature. The Bush administration had decreed that it would not renew a special “Medicaid waiver,” under which Massachusetts channeled some federal money to large safety-net hospitals, unless the state redirected the money toward expansion of insurance coverage. Compelled to act, Romney and the legislature agreed on a scheme that blended ideological approaches and demanded compromise from both sides. There would be insurance for everybody, but everybody would have to pay what they could for it. Liberals wouldn’t get a single-payer plan or anything close to it; conservatives would have to put up with a large expansion of government, even by Massachusetts standards.
These circumstances help explain why Obama and the Democrats chose the Massachusetts model of reform. If you’re looking for the best health care policy to reduce costs while covering everyone, you’d probably go with some kind of single payer system. Every other industrialized country has some version of single payer,and they pay half as much as we do per person, while getting similar or better results and covering everyone.
Unfortunately, every attempt to pass single-payer legislation in the US has been crushed, since they first tried back when FDR was president. So, instead of looking for just the best overall policy, Democrats sought out a health reform policy that had the best chance of passing here. And if those are your criteria, then Massachusetts would be at the top of your list.
How well has it worked?
Depends who you talk to. Conservatives see Massachusetts as an example of the failure of government reform, and liberals see it as an example of the failure of for-profit insurance. But the truth is that it did exactly what it was designed to do.
The thing a lot of people forget about Massachusetts’ health reform plan is that it was not “comprehensive” health care reform. Comprehensive reform is reform that addresses all three parts of our health-care crisis:
- access (how many people have care)
- cost (how much they’re paying for it)
- and quality (how good it is)
Massachusetts’ reform was only designed to tackle the first part: access. As the Boston Globe explains:
The path toward near-universal care featured delicate negotiations. Leaders hit many potholes before reaching consensus among businesses, health insurers, health care providers, consumer groups, and trade unions, and all sides agreed to put off the thorny debate about cost-control measures until later.
In terms of coverage, the Massachusetts health reform effort has been an amazing success. Less than three years after the law was passed, it’s estimated that only 2.6% of residents remain uninsured. Over 97% are covered, the highest rate in the country- and that’s been during the middle of a historic economic downturn.
But coverage doesn’t necessarily translate into access– the ability to see a doctor when you need to. One major problem that Massachusetts has had is that increased coverage has led to increased demand for care, and, like many states, they are facing a shortage of nurses and primary care physicians. Waiting times for appointments has increased, along with the number of physicians who have stopped taking new patients.
Despite all this though, according to a study by the Urban Institute this past March, over 90% of adults in Massachusetts have a regular source of care, and most people reported seeing a doctor in the previous year.
Near universal coverage has also given Massachusetts motivation to address the doctor shortage. Recent legislation:
- establishes a program to attract primary care providers to rural and underserved areas;
- increases training programs for primary care providers, and
- expands the role of nurse practitioners and physician assistants.
Another barrier to access has been affordability. Even after reform, 21% of residents reported going without needed care because of the cost. But again, there’s more to the story. The percentage of people going without needed care actually dropped 4% in the first year the law was in effect, and remained steady even while the declining economy reduced people’s incomes. And for those who are eligible for subsidies- people making less than three times the poverty line- the proportion skipping care because of cost fell from 27 percent to 17 percent. While reform hasn’t solved the access problem, it has made it a lot less severe.
Cost and quality
This hasn’t changed much- Massachusetts still has some of the most expensive health care costs in the country, thanks in large part to high demand for brand name, high tech medicine. But again, cost control wasn’t really part of the original package. Massachusetts has only recently begun addressing the cost problem, and what they’ve proposed goes far beyond any other state.
In August 2008, the state initiated the second phase of health reform which:
- Requires statewide adoption of electronic medical records by 2015;
- Sets a statewide standard for uniform billing and coding among health care providers and insurers;
- Requires annual public hearings with providers to investigate cost drivers and recommend cost-reduction mechanisms;
- Bans gifts to physicians from pharmaceutical companies and implements a program for educating providers on the cost-effective utilization of prescription drugs; and
- Creates a MassHealth medical home demonstration project.
Some observers, like Maggie Mahar, author of Money Driven Medicine, have pointed out a number of problems in adding more people to the health care system, without tackling issues like cost and physician shortages first. Others have said that expanding coverage had to happen first, because it forced the state to finally tackle health care costs.
What do people in Massachusetts think?
We’ve seen two major polls lately asking Massachusetts residents how they feel about reform in their state. The first poll was done by Rasmussen. Rasmussen is theoretically an independent polling firm, but Democrats and liberal bloggers have noticed a shift and its results are almost always more favorable to Republicans and Republican causes than any other pollster.
Keeping that in mind, in the Rasmussen poll only 26 percent of likely voters in Massachusetts believe health care reform has been a success and just 21 percent believe reform has made health care more affordable.
Meanwhile, a poll done by the Harvard School of Public Health and The Boston Globe found that Massachusetts residents supported their state’s health reform by a 2 to 1 ratio. Despite the poor economy, which has led the state to cut a number of programs, 59 percent of those surveyed said they favored the state’s multimillion-dollar insurance initiative (although that is down from 69% a year ago). Also:
The poll found that 79 percent of those surveyed wanted the law to continue, though a majority said there should be some changes, with cost reductions cited as the single most important change that needs to be made.
Only 11 percent of state residents favored repealing the law, similar to last year’s finding.
There are a couple of ways of looking at the two polls. You could dismiss the Rasmussen outright- there’s plenty of evidence that they’ve asked conservatively biased questions in the past. Or you could try to combine the two polls into something that makes sense. Perhaps, the voters in Massachusetts don’t necessarily feel that the program has been a success yet, but they want it to continue. In other words, they see it as a good start.
And about the most controversial part of the Massachusetts plan- the individual mandate requiring that people buy insurance or face a tax penalty. In a December 2008 poll by the Kaiser Family Foundation and Harvard School of Public Health:
- 67% supported a mandate that included help for people who couldn’t afford to buy insurance.
- But approval fell to 19% when they were told some people would be required to buy policies they found too expensive or didn’t want.
The lesson for the rest of the country is clear- people will support the individual mandate as long as people are given insurance choices that they can afford.
We’ll look at more lessons from Massachusetts in our next post.