Book: ‘Great Experiment’ Of Mass. Reform Should Not Go National

In Democrat-dominated, famously liberal Massachusetts, the Pioneer Institute is a downright dissident voice. It is an independent non-profit that believes in “rigorous, data-driven” thinking and backs “free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government” — in short, it is that rare Massachusetts institution that leans right.

In discussions about health reform, the Pioneer Institute arguments often challenge the state’s party line. Such as, for example, that Massachusetts reform is such a clear success that it can serve as a model for the rest of the country. The Pioneer Institute regularly shares its health-reform arguments on its blog and elsewhere (including valuable comments on CommonHealth), and has just come out with a book: “The Great Experiment: the States, the Feds and Your Healthcare.”

I spoke today with Josh Archambault, the Pioneer Institute’s director of health care policy and one of the book’s co-authors, and shamelessly pressed him to simplify the book’s arguments — which are already well simplified in the text — into even smaller soundbites. He kindly obliges here — and also allowed us to share graphics worth a thousand words. Our conversation, lightly edited:

So how would you sum up the central argument of the book?

Josh Archambault

There are two: The first one stems from a frustration with the national dialogue on health reform and how little state perspectives have been part of that discourse. So we have laid out a blueprint of how we believe we should move forward in resetting the state and federal relationship on health reform. From our perspective, we would like to see states have a lot more flexibility in how they tackle the health challenges they face.

The second one revolves around Massachusetts, which is that during this presidential debate season we’ve seen a number of “experts” arise that aren’t fully informed about the history and the current state of play in our state. And we wanted to put in one location the latest data, and a concise history of what happened during the debate and what has happened during implementation.

 In chapter 6, it sounds like what you’re arguing is that what began as Romneycare was effectively subverted by the Patrick administrations that followed. What is that story?


I think our point is that the law that was passed was really a framework for reform, and depending on your perspective, whether you think the Patrick administration has merely put its own distinctive footprint on the reform or they’ve — as you said — subverted the process, it looks very different in many respects from the original vision espoused by the Romney administration or even the one discussed during the legislative debate.

And how would you sum up that change?

Well, I took a full chapter to do it….I would summarize it as: The Patrick administration has put their ideological stamp onto the reform and that has led the regulatory bodies and the Connector board to be much more prescriptive to reduce choice and competition, more so than was the original vision of the reform.

And why does that matter?

It matters in its most vivid form for small business. One of the promises of the reform was to drastically change the purchasing process for the small companies in the Connector, and that has simply not happened.

So things end up no better for small companies than before?

Correct. I would say the options available to small companies inside of the exchange are no different than what they can find outside. When the original vision for the Connector was laid out, there was no talk of metallic tiers, and the discussion was 300,000 lives under a robust defined contribution system. And we’re very far from that in reality.

 How would you describe the alternative reality we’re in?

Overly cautious and potentially ideologically opposed to market forces.

My other favorite part of the book is the chapter examining the results of Massachusetts reform as they are playing out, including many helpful charts. Again, to introduce the sampling of lovely graphics below, could you please violently simplify?

The way I think about it is: What can we learn from the Massachusetts data? The lesson is that this is a state experiment focused for just 2 percent of the population of the country, and we’re just now learning what has worked, what hasn’t worked and what we still don’t know.

How would you paint that picture?

It’s in the graphics, but in short: The level of insurance is much higher. Certain minority populations have seen big decreases in the uninsured rate. And individuals purchasing insurance on their own have seen some relief.

On the flip side, small business has not seen much relief. The health safety net dollars and demand are creeping up. And the cost of health care is still very expensive in our state.

Massachusetts wait times

Source: The Great Experiment

Mass. preventative health care

Source: The Great Experiment

 

Uninsured minorities in Massachusetts

Source: The Great Experiment

 

Massachusetts safety net users

Source: The Great Experiment

You make an argument I’d call Massachusetts Exceptionalism: that because of our atypical characteristics, we don’t serve well as a national model. Are we really that different as related to reform?

I think Massachusetts falls on a spectrum of uniqueness: other northeastern states are similar to us in many regards, but the comparison that is fixed in my mind most strongly is when you compare Massachusetts to a place like New Mexico: The uninsured rates — even before reform, we’re talking a magnitude of three times’ difference; income levels, education levels, medical infrastructure differences, geographical density of where most of the people live — all are drastically different scenarios and probably most important is differences in employer attitudes about offering health care. There’s extreme stickiness in our state in the attitudes of employers toward offering insurance: When you talk to small business owners here in Massachusetts, they will go to great lengths to continue to offer insurance to their employees.

The other difference I would say is that we see the federal and state laws as very different. The state law — the analogy is that it’s like a car: It’s smaller, it’s more flexible, it still can have problems, but can be adjusted quickly. But the federal law is more like a train: it has wheels, it has windows and an engine like the car, but it runs on a track that’s much much harder to change and is inflexible, and it runs through all areas of health care: Medicare, Medicaid, nothing goes untouched.

We look to history to inform the way forward. Settlement came for welfare reform in 1996 only after 45+ waivers were granted to states that allowed the general public and policymakers to learn what worked and what didn’t. Only then did a level of comfort come for major reform. Regardless of the outcome at the Supreme Court in June, I can assure you that settlement will not come quickly on healthcare until states have a greater say in how they tackle the challenges they face.

 Last but not least in this heartless soundbiting exercise, what is to be done?
We lay out three pillars of reform that we think should be pursued at the federal level:

•A refundable tax credit targeted at those purchaising insurance on their own or who work for a small company.
•Federally financed but state-run high risk pools to handle the 2 to 4 million people who have existing conditions.
•A meaningful Medicaid reform package, giving states more flexibility with greater accountability from the federal government.

And at the state level?

At the state level, we’d like to see greater flexibilty in plan design for the insurers. Our concern is that the Connector has been very prescriptive in what insurers can offer within the Connector. We’d recommend a reexamination of: state mandates, regulatory rules on health savings accounts, medical loss ratios, scope of practice laws, medical malpractice, medical licensure requirements, and reform of the certificate of need process.

If the Commonwealth is serious about long-term reform, we need to move away from discussions of price controls and towards reforms that will result in better informed consumers with the proper incentives to seek lower-cost high-quality insurance and health care services.

Readers, thoughts, reactions? The book is here, including free downloads of the preface, one chapter and the introduction by Harvard Medical School dean Dr. Jeffrey Flier.

 

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