NCPA - National Center for Policy Analysis

RomneyCare 2.0

August 10, 2012

The Affordable Care Act's (ACA) illusions are starting to fall like autumn leaves, even among some liberals, and what they're discovering are things that have happened over and over again in Massachusetts, says the Wall Street Journal.

Boston's latest adventure deserves particular scrutiny, since odds are its methods are coming soon to a hospital near you. After more than a year and a half of debate, the legislature recently passed a far-reaching "cost containment" bill that Democratic Governor Deval Patrick is about to sign. It is the inevitable postscript to the model that Mitt Romney introduced in 2006.

  •  Seventy-nine percent of the newly insured are on public programs.
  • Health costs -- Medicaid, subsidies, public-employee compensation -- will consume some 54 percent of the state budget in 2012, up from about 24 percent in 2001.
  • Over the same period state health spending in real terms has jumped by 59 percent, while education has fallen 15 percent, police and firemen by 11 percent, and roads and bridges by 23 percent.

Under the cost containment plan, all Massachusetts doctors, hospitals and other providers must register with a new state bureaucracy as a condition of licensure. They'll be required to track and report their financial performance, price and cost trends, state-sanctioned quality measures, market share and other metrics.

In principle, such transparency could increase useful information about cost and quality; however, today's lack of comparative tools makes it hard for consumers to search for value in health care, even when they have the incentive to do so.

In reality, an 11-member board known as the Health Policy Commission will use the data to set and enforce rules to ensure that total Massachusetts health spending, public and private, grows no more than projected gross state product through 2017, and 0.5 percentage points lower thereafter.

  • No registered provider is allowed to make "any material change to its operations or governance structure," the bill says, without the commission's approval.
  • The commission can also rewrite the terms of provider contracts with insurers and payment levels and methods if they are "deemed to be excessive."

Washington has never gone as far as Boston is now going, installing itself as the arbiter of care in order to redesign care, though under the ACA it's only a matter of time. Everyone agrees that the health system needs to deliver medicine more efficiently and be more accountable, but accountable to whom?

Source: "RomneyCare 2.0,"Wall Street Journal, August 5, 2012.


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