Second Opinion: Revolution Redux
Column
Written by Michael Sharkey   
Sunday, 01 June 2008
Second Opinion: Revolution Redux - Health Executive - RedCoat PublishingOn April 12, 2006, Massachusetts enacted historic healthcare reform legislation that would provide near universal coverage for its residents. Two years later, more than 340,000 previously uninsured individuals are now enrolled in health plans, the number of free-care hospital visits has decreased an estimated 28% statewide, and free-care funding has been slashed by $242 million.

In a word: wow. More than 340,000 people (equivalent to the entire population of New Orleans) who did not have health insurance in Massachusetts two years ago have it today. As Massachusetts Hospital Association president Lynn Nicholas put it, “Healthcare reform has proven to be successful beyond all of our expectations.”

There’s no doubt Massachusetts has proven increased enrollment reduces demand for costly free care services, a central tenet of healthcare reform. Spend the money to provide more coverage, and you will cut uncompensated care—one of healthcare’s fastest growing and most unwieldy costs.

But the Bay State, the nation’s most active and observed healthcare reform laboratory, is also proving some less flattering beliefs about universal coverage, most notably: it ain’t cheap.

Originally, Governor Deval Patrick requested $1.725 billion to fund the first year of the program, which is paid for with a mix of federal Medicaid matching payments, state general funds, insurance surcharges, and hospital and employer tax assessments. The heart of the program, its subsidized insurance component, was projected to cost $472 million in the fiscal year ending June 30. Now the state says it will actually cost nearly $620 million.

And according to the Boston Globe, that cost will surge to $1.35 billion annually by 2011, “an unexpected level of growth that could cost state taxpayers hundreds of millions of dollars.” A big part of the problem, the Globe asserts, is the original legislation lacked any mandates on trimming wasteful health spending or slowing spiraling healthcare costs.

Beyond the sticker shock, Massachusetts’ reform program has also created some frustration. Newly covered residents trying to schedule appointments for long-deferred care have discovered finding a primary care physician to be a wearisome task. According to a 2007 study by the Massachusetts Medical Society, the Commonwealth is suffering from a “severe” shortage of family physicians and internists—a problem exacerbated by the reform program.

“It is a fundamental truth—which we are learning the hard way in Massachusetts—that comprehensive healthcare reform cannot work without appropriate access to primary care physicians and providers,” Dr. Bruce Auerbach, president-elect of the Massachusetts Medical Society, told Congress in February.

The wins and losses of the Bay State’s initiative turn my thoughts to the chicken-or-the-egg question numerous reform thought leaders have been asking for the past few years: Which comes first, addressing coverage or addressing cost?

While Massachusetts has been aggressive, and in many respects a leader, in its efforts to reduce costs as part of its reform efforts, the state clearly placed the coverage issue at the forefront. Given the obstacles encountered, there is now evidence that suggests the issue of cost should take precedence.  

Therein lies the beauty of Massachusetts’ Healthcare Reform Plan. It is creating a body of evidence other states can use to shape and advance their own initiatives. And for that reason alone, the great experiment, regardless of its final outcome, is an unqualified success.
 
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