Here’s my editorial in today’s FierceHealthcare:

The passage of a universal health initiative in Massachusetts is big news. Of
course it was also big news when a certain Michael Dukakis rode that headline to
the Democratic nomination in 1988. This week a Republican governor with strong
social conservative credentials, albeit one from liberal blue state, is hoping
that the same headline will propel him to his party’s nomination twenty years
later. Naysayers on the left and the right point out that there are plenty of
holes in Romney’s plan. It depends on Federal dollars to fund Medicaid
expansion. It demands that individuals buy affordable insurance while it may
just be cheaper for them to pay the $1,000 fine. The same problem is doubly true
for employers not offering insurance who only have to pay the equivalent of one
month’s regular insurance premium–an assessment not a tax, you understand. And
of course it does nothing to rein in the underlying increases in care costs,
which are as high in Massachusetts as anywhere.

But the politics and the symbolism of this news are well worth watching. Most
observers of the health care system are agreed that we are in a crisis and
things are getting worse. Costs are going up, insurance is becoming less
affordable, employers are dropping coverage, and the population is getting
older, albeit only one year at a time. At some point we have to have the big
conversation that hasn’t happened since 1993-4. If a leading Republican feels
that he needs to support universal health insurance–a traditionally Democratic
issue–then we may just be seeing the ground symbolically prepared for the
coming debate. On the other hand, we might just remember what happened to
Dukakis and his universal health insurance legislation.

Trap has way too much time on his hands and has put a slew of links to various bloggers talking about Massachusetts. A Grand Roundup of UHC in MA

Sometimes (perhaps too often!) I agree with Eric Novack. Here’s what he writes about the pay or play version of the new Mass plan:

The recently passed bill in Massachusetts, well reported here at THCB, aims to provide ‘universal health insurance’ to state residents through personal and employer mandates, plus Medicaid expansion. It still has not been signed/ modified by Governor and future GOP Presidential candidate Mitt Romney, but the state legislature is already threatening to override any changes the governor might make.

I want to focus briefly on the employer mandate. The law, if unchanged, states that employers who do not provide health insurance would be assessed $295 per employee per YEAR. That’s right. Employers would pay about $300 per year per employee if coverage is not offered.

Does anyone see the problem? Most small businesses spend close to $300 per MONTH per employee now, for ‘good’ coverage.

Math never looks good in print, so I’ll make this example brief. Small business, ‘Matt’s Place’, has 20 employees. Currently, covering health insurance for those 20 costs 20 x $300 x 12 months = $72,000 per year. (That’s $6000 per month.)

Under the Massachusetts plan, if ‘Matt’s Place’ did not provide coverage, it would cost about 20 x $300= $6000 per year.

Hmmm. $72,000 versus $6000. And the employees would still be covered with insurance. And the company saves $66,000. A small business. Hmmm.

Any idea what is likely to happen?

But I am not against the experiment. I could be wrong.

I’m up over at Spot-On talking about the Massachusetts individual mandate. And for those of you really quick I’ll be on an internet radio show called Open Source along with Jonathan Cohn, David Himmelstein and a few others at 7pm EST. I’ll be in the odd position of being the the token right-winger!

The show is here.

UPDATE: As this went up late yesterday I’m moving it up to today.  Meanwhile, the show was fun & well worth a listen. You can download it as a podcast from the link above.

Today’s hot news is that Massachusetts is set to move to Universal Health Insurance via a universal individual mandate and subsidies for the poor. This is a good start.

Then when everyone’s paying into the system the next step is to mandate community rating and get a proper set of cross-subsidies in place. Finally, once the plans have got everyone in the system, and can’t play them off against each other, they’ll have to turn to seeing what they can do about the provider costs.

If the national system did it that way, it wouldn’t be so bad. After all, it worked in Japan and Germany.

Of course like most politicians Romney doesn’t quite understand what’s coming next.

Governor Romney, who is considering running for president in 2008, said in an interview today that the bill, passed by a legislature that is 85 percent Democratic, was "95 percent of what I proposed." He said, "This is really a landmark for our state because this proves at this stage that we can get health insurance for all our citizens without raising taxes and without a government takeover. The old single-payer canard is gone."

Either the insurers will not be regulated, and the market will implode with under-insured replacing the uninsured, and consumers and providers will be equally grumpy as it’ll all have been a head-fake. Or the insurers will be properly regulated in time, and the approach I suggest will be inevitable. And frankly that’s close enough to single payer for me to be happy so long as Mitt is….

Do any of my Mass readers have a comment or two?

I interviewed Grace-Marie Turner from Galen. Take a listen to the podcast (about 45 mins) (Unfortunately I’m very loud and she’s very quiet, so you’ll have to adjust the volume every time I come on! Also excuse the first few seconds of the call. She’d just met with Bush and was hoping to see herself on TV, and why not!)

By the end of the conversation I was way more confused about the CDHP movement than when I began. As far as I can tell she’s an advocate of managed care, disease management, and pre-paid care, and even perhaps even compulsory universal insurance. Or at least she appeared to be promoting the benefits of all those things.

It seems to me that just like Reggie, she grabbed any potential advance in health care and called it "consumerism", even if the organizations that do it best like Kaiser and the VA have no history  of HDHP and HDHP insurance products. In fact those products promote fee-for-service procedures beyond the deductible –exactly the opposite incentives that she suggested were necessary. I felt like I was listening to someone who’d read what was wrong in the Alain Enthoven manual and had no idea that the solutions she was proposing weren’t going to solve the problem.

I also spent a very long time trying to get her to explain if the healthy people are allowed to take their money out in the form of personal accounts where the extra money in the risk pool would come from to treat the sick people. (For more on this problem read down here). Unfortunately either I’m just too dumb to understand her explanation or there is no underwriting, no sick people, and no adverse selection in her world, or at least it’ll all washes out in time. And apparently no one would get a better deal in the individual market, if they could get a worse one via an association?

So I’m still awaiting the clear explanation I’ve been looking for about how this HDHP/CDHP movement is going to deal with the mathematical problems it causes and avoid destroying the risk pool. I read Cato’s book, the Hubbard one, now have talked to all kinds of HSA proponents, and not one has answered the question. I wonder why?

Still it was a fun conversation, even if I never got to the tough questions about where Galen’s money comes from  although Hillary Clinton knows!

Grace Marie will be out in SF at the CDHCC conference on May 8-10 in San Francisco