If you read only one book about state and federal health care policy, it should be The Great Experiment: The States, the Feds and Your Healthcare.  Published by the Boston-based Pioneer Institute, it is the most articulate and rigorous presentation of issues that I have seen, a stark contrast from many papers, articles, and speeches that slide by as “informed debate” in Massachusetts and across the country.  I learned more about health care policy from this book than from anything else I have read in the last decade.

While the book is constructed as a number of chapters by experts in field, it has a consistent voice and and is highly readable.  There is an engaging explanation by Jennifer Heldt Powell of the politics and substance of how the Massachusetts health care reform bill came into being; and there is also a data-rich analysis by Amy Lischko and Josh Archambault of how it is working.  But the book is quick to point out that what has happened in Massachusetts is unlikely to be an appropriate model for the nation.

Indeed, a strong theme of the book can be drawn from that conclusion:  State specific experiments in health care reform, guided by general federal principles, will be more successful over time than a single national approach that is likely to get things wrong for the whole country.

Liberal readers may shy away from this book, for the Pioneer Institute has a reputation of being a conservative think tank and advocacy group.  I suggest you judge the content on its own merits rather than applying political biases to the question of whether or not you should read the book.

With exhaustive and thoughtful arguments, the authors argue that the national health care legislation should be modified.  Notably, the book does not just take potshots at the federal law.  The authors offer specific policy alternatives that are natural extensions of the existing mix of employer self-insurance, employer purchased insurance, individual non-group policies, government provided coverage through Medicare and Medicaid, and, of course, the uninsured.  They recognize the traditional state role in many of these matters but also concede that a federal presence is necessary.

Here is an excerpt from James Capretta’s concluding chapter:

The key federal and sate actions that will advance affordable insurance and high-quality care include the following:

Convert the federal tax preference for employer-paid premiums into a refundable tax credit; this initiative should start with workers in small firms and individuals who are not in stable medium or large employer-based plans today;

Establish a federal-state partnership to protect those with pre-existing conditions, which takes the form of state administered high-risk pools financed by the federal government; and

Reform the significant portion of the Medicaid program covering the non-elderly poor, allowing states to integrate these program participants into the same insurance arrangements which cover other working age Americans.

I don’t have the space here to give the rationale for these prescriptions, but let me focus on one area.  The discussion I found most persuasive was the argument made by Tom Miller that the individual mandate contained in the new federal law is not the most effective way of guaranteeing coverage for all.  He summarizes, “Solving the problem of covering Americans with pre-existing conditions does not require a massive transformation of America’s health care system.”  He explains how the problem of adverse selection — the rationale given for the individual mandate — can otherwise be accommodated for.  He also notes that the mandate, as constructed, will fail in that it “charges a much smaller penalty to almost everyone who fails to comply . . . than their far greater cost to purchase qualified insurance coverage [with the result that] too many young and healthy people will still choose to stay out of the system . . . particularly when the [law] will allow them to enroll later as needed, without any additional restrictions on their access to coverage.”

Read the text for yourself and see if you are persuaded.  If the conclusion is correct, by the way, it could have implications regarding the legal basis for inclusion of this mandate at the federal level, which is currently being reviewed by the Supreme Court.

Jeffrey Flier, Dean of Harvard Medical School, offers a preface to the book.  He hearkens back to a November 2009 Wall Street Journal op-ed in which he argued that a successful effort to fix the health care system “would require an accurate diagnose of the elements that produced the problems” and that those who crafted the federal law “failed almost entirely to make that diagnosis, with the consequence being a failure to produce an effective remedy.”  I recall that many politically correct Cantabrigians were appalled by Jeff’s article at the time.  But The Great Experiment provides support for his proposition. Whether you like that view or not, you will be a better informed participant in the US and state health care debates if you read this book.

Paul Levy is the former President and CEO of Beth Israel Deaconess Medical Center in Boston. For the past five years he blogged about his experiences in an online journal, Running a Hospital. He now writes as an advocate for patient-centered care, eliminating preventable harm, transparency of clinical outcomes, and front-line driven process improvement at Not Running a Hospital.

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10 Responses for “The Great Experiment”

  1. steve says:

    Sounds interesting. Hope it can be had for my Kindle. Quick thoughts.

    1) Many of us have long advocated for experimentation by the states. The states have not been doing this. I doubt it will happen now w/o federal intervention.

    2) High risk pools. We know where this is going. it will be a mix of federal money and state money, like Medicaid. Some states will have adequate coverage. others will have minimal.

    3) If you integrate Medicaid patients into private insurance, costs will increase.

    Steve

  2. tomd39 says:

    The examples cited here still do not address the core problem with healthcare in the U.S., that is, the insurance industry as we know it, that symbiotic, almost parasite and host, relationship that sustains the inflated price of healthcare. We have to be more creative in crafting our solutions to this crisis.

  3. BobbyG says:

    “Solving the problem of covering Americans with pre-existing conditions does not require a massive transformation of America’s health care system.”
    __

    I have already downloaded their free excerpts, and the Kindle book is only $4.99, so I am going to get it as well.

    While I will hold my fire until I’ve read it end-to-end, I find assertions such as the foregoing troublingly ideological. The PPACA is indeed an attempt to “massively transform” AHIP-istan (rein in, w/ a massive quid pro quo and an equal mass of byzantine premium support eligibility regulation), I’m not seeing how that equates to actual “health CARE.” It wafts the indelible waft of Straw Man.

    Nonetheless, I have just finished Joe Flower’s excellent book “Healthcare Beyond Reform” (reviewed on my REC blog), and am almost done with Dr. Toussaint’s equally fine “Potent Medicine” (soon to be reviewed), both of which call for smaller-scale (but “transparent”) “innovation” models.

    Whether w

  4. BobbyG says:

    Oops, accidental click error

    Whether we can have our “transparency” cake and feast on “profitability” too is the difficult question. Flower and Toussaint give it a good go.

  5. Barry Carol says:

    While I’ve downloaded the book to my Kindle, I haven’t read it yet. That said, I want to offer a brief comment about high risk pools. My understanding is that there are approximately 4-5 million people younger than 65 in the U.S. who are medically uninsurable and would be candidates for coverage through high risk pools. I’ve learned that existing state pools have a medical cost ratio of 200%-300% with the excess over the high beneficiary premium covered by a combination of surcharges on the health insurance industry and state subsidies. It could easily cost $20K – $25K per person to fully cover this small population or $80-$100 billion per year on a nationwide basis. It’s hard to imagine that politicians at either the federal or state level would be willing to spend anywhere near this much in tax money on such a small population many of whom are too sick to even vote. The bottom line is that while there may be a good economic case to be made for greatly expanded high risk pools, it probably wouldn’t be able to make it through the political process.

    • BobbyG says:

      Indeed, Barry. Continuing within an aggregate paradigm of the actuarial for-profit risk model will be increasingly problematic.

  6. Andrew says:

    While I know there are more and more people, a great way to reduce health care costs would be to reduce ER visits. I’m leery of demanding intervention from the federal level until costs stabilize, or we could be committing a huge chunk of tax dollars into the health care system that benefits the already well off.

  7. BobbyG says:

    Well, I’m 2/3 of the way through the book thus far. Very nicely done, a good read. But, I haven’t encountered so many hedges since “The Shining.”

  8. BobbyG says:

    Finished reading the book. Very good, though the partisan tone increases toward the end. I can see why Romney wants to stay away from talking about “RomneyCare,” though, after reading this.

    $4.99 for the Kindle version. Worth it.

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