Given the size of the problem, last night’s final gubernatorial debate included surprisingly little about health care and its ever-spiraling costs. But there were a few choice bits. Nancy Turnbull, associate dean of the Harvard School of Public Health, and Jon Hurst, president of the Retailers Association of Massachusetts, kindly agreed to share their reactions with CommonHealth.
Democratic incumbent Deval Patrick: “Small businesses make up 85% of the businesses here. Their two biggest complaints are the cost of health care and access to capital. And we’ve done more in these areas than any other administration in a very, very long time…in permitting small businesses to buy their health insurance in aggregate through cooperatives to get the same buying power that bigger businesses do.”
“In terms of health care, I like and am proud of our hybrid system — it’s a public-private reform. But I think the next big frontier is cost control, and payment reform is the way to get there, and that will take political courage.”
Nancy Turnbull: Health cooperatives were just authorized in Chapter 288 and are not up and running yet, so no small businesses have saved any money from this approach. And it’s not sure that such cooperatives will result in lower premiums. If they do, it’s quite likely that savings for the cooperatives will come at the expense of higher premiums for other small employers and individuals, which is why many health policy people and consumer groups opposed this provision of the legislation, including me.
Jon Hurst: The cooperatives legislation is a reform the small business community has pushed hard for ever since mandated health insurance passed in 2006. And for good reason. Small businesses have been hammered with 73% increases (about 3 X the rate of big business & big government) since the law passed, and that doesn’t include the increased out of pocket deductible and co-pay costs which have ballooned during this recession. The cooperatives still need implementing regulations which will determine whether small businesses will indeed have equal rights with big employers, allowing them to use cost saving tools including self insurance and more flexible rating systems to encourage wellness and better choices among providers. The legislation was certainly a political compromise and will in fact only allow 85,000 lives to join the cooperatives—representing 10% of the merged marketplace. Perhaps the most important outcome of the cooperatives effort will be whether the results show that the antiquated community rating system used in Massachusetts for groups of 50 and under is indeed discriminatory, as well as counterproductive to the important goals of achieving a healthier and more educated consumer of health care services.
Given the enthusiasm for payment reform within some provider camps, consumer caution is well advised. The devil will truly be in the details as real questions remain on what services are included in bundled payments. Far too many costly, non-critical, and unused services today are mandated under state law and included in fee for services—driving health care inflation and putting all the economic power in the hands of the provider, not the consumer. The key questions moving forward include: who will make the decision on the amount of those bundled payments going to the providers; and will consumers have more choices on the types of benefits allowed under their insurance, or will those decisions be made by bureaucrats, providers, or advocates of unfair levels of cross-subsidies.
Q: What will be the first thing you do in office?
A: Deval Patrick: The very first thing we’re going to do is to get to work trying to — continue the work — bringing the cost of health care down. Because that is the single biggest concern for small businesses, medium businesses and large businesses alike.
Nancy Turnbull: I agree about the urgent need to moderate health care costs.
Green-Rainbow Party candidate Jill Stein: “There’s no way we will be able to address the needs in the budget, or the needs of our small businesses and our families, if we haven’t conquered the health care problem. Health care is now 50% of our budget; one out of every two tax dollars is being used for heath care, yet most of that is for disease care for problems which are actually preventable at a fraction of the cost.
So two things on health care that I can promote because I’m not a creature of business as usual: One is to go after the massive health insurance bureaucracy, which is adding billions to our cost of health care. So by moving to a single payer system right out of the starting gate, we can take out perhaps 2 billion dollars off the costs of health care and start to solve the problems for our small businesses.”
Nancy Turnbull: I don’t think health care is 50% of the state budget. You should check with Mike Widmer on this but I think Medicaid is about $10 billion, and GIC is about $1 billion. DMH, DPH and Connector are another $2 billion. So that’s $13 billion. Total 2011 spending is projected to be $32 billion.
I agree with Dr. Stein’s general point about much of disease being preventable. Not sure it’s most, however. But there are also significant savings and improvements in quality to be had by changing the way we deliver medical care. (see, for example, your recent stories on Commonwealth Care Alliance. FYI: I am on the CCA board of directors).
Not sure where the $2 billion in administrative savings number comes from so it’s hard to know if this is accurate or not. It is certainly true that the structure of the health care financing system in the US results in administrative costs that are much higher than those in countries that rely on less fragmented and more universal systems, regardless of whether those are single payer or some other model.
Jill Stein: [The other candidates] all support the same health care elephant in the room. It is the one area of the budget that has grown; everything else has shrunk. Ten years ago, health care was 35% of the budget; now it’s 50% of the budget. Everything else has shrunk to make room for it.
Nancy Turnbull: While I disagree about the 50% figure, I completely agree with Dr. Stein’s point here: if we do not find ways to control the growth of health care spending, we will not have resources to spend on other vital public services, many of which would increase health much more than additional spending on medical care (e.g., education).
Other comments welcome below!