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Healthcare Reform II

Email|Print| Text size + By Steve Bailey
Globe Columnist / February 6, 2008

In the hard-fought campaign between Barack Obama and Hillary Clinton, the major domestic policy difference separating the two is healthcare. In the shorthand of a campaign, the argument comes down to mandate or no mandate. Should every American be required to have insurance? Clinton says yes; Obama says no.

While America continues to debate, Massachusetts is the one state that has committed itself on a bold path to universal health insurance. It is no exaggeration to say the nation is watching. Here the issue is not mandates or not - yes, you must have insurance, and if you can't afford it, we will help you pay. No, the question in Massachusetts comes down to this: Have we promised more than we can deliver?

That question has been pushed front and center over the last couple of weeks by the reporting of my Globe colleague Alice Dembner, who has been writing about the rising bill for the state's new healthcare reform law. On Sunday, Dembner wrote that the state badly underestimated the number of uninsured residents and reported projections by the Patrick administration that the enrollment and expense of the uninsured could double over the next three years. The cost of the program could reach $1.35 billion annually by 2011, she reported.

These are big numbers, considering the state's already tight budget situation even before a recession. But those who have spent the last couple of years building consensus on healthcare reform here insist the sky is not falling. To start with, they say, the political will among the governor and legislative leaders remains strong, just as it was through all the years of the billions spent on education reform. And the federal government continues to pick up a major, if uncertain, portion of the cost going forward through Medicaid reimbursements.

But on Monday Jon Kingsdale, who as head of the state's Commonwealth Connector is charged with making the whole thing work, told me what he has told me before: "This is not sustainable if we don't deal with affordability."

Healthcare Reform I dealt with only half the problem, the problem of access to insurance for those left out of the system. Still urgently needed: Healthcare Reform II, aimed at substantially slowing the rising costs. Kingsdale has it exactly right: Broadening coverage without slowing costs is not a sustainable model.

Massachusetts' healthcare reform law is not to blame for the rising costs. Every private employer, municipality, state, and the federal government is facing the same pressures from double-digit premium increases. It is the healthcare delivery system itself that must be restructured if those cost pressures are to be slowed. The budget squeeze and the slowing economy just make the state's problems more urgent.

In a way, Healthcare Reform I, hard as it was, was the easy part. Almost everyone was a winner: Those without insurance got coverage and help in paying for it. The hospitals and doctors got higher reimbursement rates. The business community was largely left off the hook. And the pols got something to run on in the next campaign.

Healthcare Reform II - controlling costs - will involve harder choices, and will produce losers as well as winners. It will involve confronting Massachusetts' powerful medical-industrial complex, a wonder of the state's economy but also a driver of high costs. But there is no choice if Massachusetts' admirable experiment is to work.

Conversations about healthcare reform's second leg are being held at all levels of government and in every sector of the industry. The best solutions will come from a remaking of the healthcare delivery system that emphasizes incentives for lower costs and improved quality. Initiatives such as Blue Cross and Blue Shield of Massachusetts' introduction of capitation 2.0, which pays doctors a flat fee to care for patients, and CVS's plan to put clinics in its stores, to name but two examples, hold promise.

If that doesn't work, expect the conversation to turn to reregulation of insurance and hospital rates, a less appealing alternative.

Massachusetts did what no other state was willing to do because it got tired of access being held hostage to cost. But broadening coverage without slowing costs will not work. In the end, it will break the bank.

Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902.

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