Tuesday, March 29, 2011

The Next Stage in Massachusetts

So now that the Massachusetts health care experiment has failed, what's next? In this 3/1/2011 essay, John Calfee discusses both the past and the future in "The Massachusetts Health-Reform Mess".

First, the problems we already know about:
Coverage increased from about 88% to 96%. But the number of emergency room visits, which everyone expected to drop once people had to purchase insurance, is still going up...

Despite an individual insurance mandate, thousands of consumers wait to purchase coverage until they require costly procedures and then exit after paying a modest penalty. That makes insurance more expensive for everyone else.
And the proposed response to these continually escalating costs:
Gov. Patrick introduced a bill that will impose de facto price controls on everyone from solo primary care doctors to prestigious academic hospital systems. An 18-member board will decide how and how much providers should be paid, and the bill gives regulators the power to force private insurers to accept these fiats. Some 30 states experimented with such rate-setting in the 1970s and '80s. Except for Maryland, all of them—including Massachusetts—deregulated in the 1990s because costs rose even as quality and choice declined.

In a mere four years, Massachusetts has demonstrated that the most important effects of its reform arise not from the letter of the law but from the law's unintended and unpredictable consequences. The state is lurching from one crisis to another as it attempts to construct a system vastly different from any seen before or anything contemplated when reform was first passed. Health care in the state is evolving toward a state-run version of Medicare combined with government reorganization of the delivery of medical care.
(Read the full text of "The Massachusetts Health-Reform Mess".)

Controls breed more controls. The signs are already clear in Massachusetts. And unless we repeal ObamaCare, this will be the unhappy future for the rest of the United States as well.