OP-ED

Massachusetts Update

I have written several times about the ongoing saga between the state administration and the health care insurers in the state concerning premiums for small businesses and individuals. Over the last several weeks, several insurers have reached settlements with the Division of Insurance. At least one has not and has prevailed at the appeals board because the rates forced upon it by the state were not actuarially sound. Where settlements have been was reached, they were not based on actuarial principles: They was based on a desire to get past this impasse and provide some stability to customers.

Here’s a quote from one company official:

Blue Cross spokesman Jay McQuaide said the organization agreed to accept “less-than-adequate rates’’ — which he said are too low to cover its costs — to resolve the uncertainty for customers.

The disturbing aspect that remains is a lack of understanding by some state officials of the issue. There appears to be a presumption that hospitals and doctors are somehow taking advantage of the situation to raise their costs. But that is at variance with what hospitals are actually doing and facing.

Here, for example, we see one hospital facing huge losses and another one laying off staff in the face of financial pressures.

There are sophisticated observers of the scene, however, who continue to offer thoughtful views. Here is an op-ed in today’s Boston Globe by Robert Pozen entitled “A bitter health care pill.” An excerpt:

[T]he perfect is often the enemy of the good in health care. Instead of taking a decade to move from fee-for-service to a capitation system, the state should implement two relatively significant cost-saving measures: Reduce the number of mandatory coverage items and charge higher co-payments for using the highest-cost providers.

Paul Levy is the President and CEO of Beth Israel Deconess Medical Center in Boston. Paul recently became the focus of much media attention when he decided to publish infection rates at his hospital, despite the fact that underMassachusetts law he is not yet required to do so. For the past three years he has blogged about his experiences in an online journal, Running a Hospital, one of the few blogs we know of maintained by a senior hospital executive.

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Super Visa
Guest

Excellent site !It’s going to and share with us.Your and knowledge topic is amazing i just read whole topics. I really like this incredible website to a great extent. I learn many important subject daily site. Thanks admin for sharing like nice site.

FL
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FL

MA health care reform has been a disaster for my family. My wife and I are fined about $2400 each year by the state of Massachusetts for not buying health insurance. I’m almost 60, been layoff, and jobs are hard to find. We live basically off our savings and investments and always paid our own medical costs; but, since receiving the fines our family budget is now out of balance, I‘ve had to reduced my insulin shots to save money; this will eventually lead to organ failure. The state is literally killing me with there fine. I’m being fined for… Read more »

Peter
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Peter

“I think the problem is that they face too many disadvantages.” Well of course they do Barry. Most of it environment, poor role models and little resources. If you think vouchers are the solution would those vouchers be able to be used for the suburban schools, and if so how would they get to those schools – busing maybe? You can also research Wake county schools to see if a “tipping point” was a problem or if test scores was also a problem. Resources is not the problem, allocation of resources is. As far as bussing is concerned it attempted… Read more »

Barry Carol
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Barry Carol

“So it’s the poor kids fault that the suburb schools they moved to became terrible?” Peter – I don’t think “fault” is the right word in this context. I think the problem is that they face too many disadvantages. I’ll bet that if you took the teaching staff from a high performing suburban school and transferred them en masse to an inner city school, the students’ achievement probably wouldn’t come close to matching that of those in the upper middle class suburban school. Why is that? The upper middle class kid probably has college educated parents who can help with… Read more »

Peter
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Peter

Nate, you can research Wake county schools and test scores yourself. The issue was not test scores, or bad schools for those opposed to busing, it was just the inconvenience of it and the lack of any social solidarity, and of course ideology . “so instead of the really poor kids having a terrible school and not learning anything both the poor and middle class had terrible schools.” Separate but equal? So it’s the poor kids fault that the suburb schools they moved to became terrible? See that’s the reason nothing’s done about inner city schools, because they’re “not our… Read more »

Nate
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Nate

“The mixing was working well and made sure we didn’t have economic segregation,” Please define worked well and back it up with some proof. My high school in Vegas also did bussing, so instead of the really poor kids having a terrible school and not learning anything both the poor and middle class had terrible schools. My senior year they buuilt a new school for the rich kids and they moved out. Bussing doesn’t improve outcomes it just lowers them to an equal level. Kids that could have excelled or done average at least instead also get a poor education,… Read more »

Peter
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Peter

“I wouldn’t be surprised to find the educational opportunites at most prisons are better then most inner city schools.’ Well then let’s ask the folks in the suburbs if we can bus the inner city kids to their safe, well supplied, lots of food, great teachers schools. What do you think the answer would be – HELL NO? Here in Wake County there has been a school diversity program for many years where poor(er) kids were bused to more economically advantaged schools and visa/vera. The mixing was working well and made sure we didn’t have economic segregation, but new Republican… Read more »

Nate
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Nate

Pragmatic Pappu, I’m afraid you mistake hitting a branch on the way down as stopping your fall. Let me assure you that you are not only still falling but are picking up speed. All the new debt, ignoring BK law for political gain, 26 billion annual payoffs to Unions, you are closer to splattering on the bottom then you ever have been. If anything you swerved to avoid a pothole and drove off the side of the road. “if others can get the same outcome at half the cost we pay, then the right capitalistic response cannot be to spend… Read more »

Pragmatic Pappu
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Pragmatic Pappu

Nate, What a difference a year makes – not sure if you had any comprehension of the cliff we had teetered to the edge of. That we did not fall off the cliff does not mean the cliff was not real, or that it would not have been catastrophic had we indeed veered off the edge. The bailouts helped prevent us from getting off the edge. So, instead of being angry at being saved from falling off, you might be better of directing your anger at how we got to the edge in the first place. Also, the fundamental tenet… Read more »

Barry Carol
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Barry Carol

Peter and Nate, If people needed fewer healthcare services because they were able to stay healthier longer, if doctors ordered fewer unnecessary tests, and necessary healthcare were directed to the most cost-effective providers, society would be better off even if there were fewer jobs in the healthcare sector. The same is true if there were less fraud, less futile care at the end of life and less defensive medicine. By the same token, if Defense Secretary Gates is successful in canceling weapons systems that the Pentagon doesn’t want and redirects the savings, at least in part, to modernization programs that… Read more »

Peter
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Peter

“Washington being as broke as it is to be honest I rather see HC spening hit 20% right now then go down.” Sure, if you make your living from healthcare. I bet those who make their living from healthcare fraud would like that % to go higher as well. “Education doesn’t need another penny, have you seen the inflation in educaiton compared to HC?” Well if your state is anything like the rest you’ll notice cutbacks in education, layoffs, and program cuts. It’s equivalent to eating your seed corn. But maybe we can build more prisons with the savings and… Read more »

Paolo
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Paolo

“Paolo do you think reserach returns anything close to healthcare?” I think it actually returns much more. We wouldn’t be the world’s superpower if we hadn’t been the country that invented the telephone, the transistor, the computer, the Internet, the atom bomb, and more modern technology than the rest of the world combined. Some of if it eventually leaks overseas, but we are still world leader in high tech (this is especially true in medical devices). Without our Googles and Intels and Microsofts and Apples, our standard of living would be much lower. I agree that there is currently a… Read more »

Nate
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Nate

if a 3% reduction in HC spending meant even a 1% reduction in debt I would jump all over that in a heart beat. I have no reason to beleive and I don’t think histoiry as ever shown a time where washington would take even a penny of every dollar saved and reduce debt. I don’t think a single penny of our current HC spending either comes from debt maintenance, repayment, or forebearance. Washington being as broke as it is to be honest I rather see HC spening hit 20% right now then go down. If our debt was higher… Read more »

Peter
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Peter

“What does Duke do to justify its tax exemption?”
I guess the same way BCBS justifies it’s exemption.
“Market-theory economics doesn’t work very well with health care.”
Agreed.
Nate, being happy with the economic contribution high healthcare spending produces is like being happy with the economic contribution vandalism produces. The broken window theory. And if you’re happy forcing people to spend on domestic healthcare as opposed to foreign products, why aren’t you happy with forcing people to spend on domestic taxes, which are spent in here as well?

jd
Guest

Clarification: on a government level, lower health spending is in the first case about incurring less future debt, which is more or less equivalent to paying off old debt in the same amount.
The recurrence of the 3% figure in different contexts is unfortunate. Hopefully it doesn’t make the argument harder to follow.