NCPA - National Center for Policy Analysis


November 18, 2009

As the health care reform debate nears a conclusion, it would be prudent to examine the lessons learned from the recent experience with reform in Massachusetts.  There, insurance mandates similar to those proposed in the federal legislation succeeded in expanding coverage but -- despite initial predictions -- increased total spending, says Jeffrey S. Flier, dean of the Harvard University Medical School.

A "Special Commission on the Health Care Payment System" recently declared that the Massachusetts health care payment system must be changed over the next five years, most likely to one involving "capitated" payments instead of the traditional fee-for-service system, explains Flier: 

  • Capitation means that newly created organizations of physicians and other health care providers will be given limited dollars per patient for all of their care, allowing for shared savings if spending is below the targets.
  • Unfortunately, the details of this massive change -- necessitated by skyrocketing costs and a desire to improve quality -- are completely unspecified by the commission, although a new Massachusetts state bureaucracy clearly will be required.
  • Yet it's entirely unclear how such unspecified changes would impact physician practices and compensation, hospital organizations and their capacity to invest, and the ability of patients to receive the kind and quality of care they desire.
  • Similar challenges would eventually confront the entire country on a more explosive scale if the current legislation becomes law.

Selling an uncertain and potentially unwelcome outcome such as this to the public would be a challenging task.  It is easier to assert, confidently but disingenuously, that decreased costs and enhanced quality would result from the current legislation, says Flier.

So the majority of our representatives may congratulate themselves on reducing the number of uninsured, while quietly understanding this can only be the first step of a multiyear process to more drastically change the organization and funding of health care in America.  According to Flier, he's met many people for whom this strategy is conscious and explicit.

We should not be making public policy in such a crucial area by keeping the electorate ignorant of the actual road ahead, says Flier.

Source: Jeffrey S. Flier, "Health 'Reform' Gets a Failing Grade," Wall Street Journal, November 17, 2009.

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