Then there’s the problem with the safety net hospitals, which did not find themselves in the winner’s circle after health reform passed. Last week, the Boston Medical Center, which serves Boston’s poorest neighborhoods—half of its patients make less than $20,400 per year—filed a suit against the state, which hospital officials call “a cautionary tale for national federal health care reform.” The suit alleges that Massachusetts has underfunded the medical center by not adequately covering the cost of care for patients on Medicaid, Commonwealth Care, and those who remain uninsured. One third of the Center’s patients are on Medicaid, a rate higher than other state hospitals.
Last winter I interviewed the Center’s vice president, Tom Traylor, who told me of the hospital’s reluctance to speak against the law, but said that the time had finally come to do just that. Now, with the suit, the hospital is speaking louder. The hospital is facing a budget gap of $180 million because promised funds did not come its way, and because Medicaid reimbursements and money from the state’s free care fund simultaneously decreased. Instead, Traylor says, some of that money was used to subsidize insurance policies for poor people, in a kind of robbing Peter to pay Paul arrangement. “We’re Peter,” he says. “Basically, it’s shifting money around.”
That sounds like a solution some hospitals floated a few weeks ago for national reform. They proposed cutting payments to hospitals that serve a disproportionate number of poor patients. But since the law passed, as the Boston Medical Center has learned, hospital admission rates have increased, as have outpatient visits—and patients aren’t any less costly to treat. A cautionary tale, indeed!
The turmoil in Massachusetts is reminiscent of Tennessee’s bold attempt to provide health care coverage fifteen years ago. TennCare, which provided coverage to poor people and those who were uninsurable because of preexisting health conditions, eventually collapsed under the weight of rising costs. Four years ago, the state summarily dropped coverage for thousands, rationing prescription drug coverage for those who remained.
Things have gotten so bad in Massachusetts that Philip W. Johnston, chairman of the Blue Cross Blue Shield of Massachusetts Foundation—the birth mother of reform and its chief advocate—has now said that the state needs a dedicated revenue stream to protect its growing child. That’s the same point Traylor made to me months earlier. While Traylor says the law “is not working and needs new revenue,” he also says there’s no appetite for further tax increases. The legislature just hiked the sales tax from 5 percent to 6.25 percent.
The financial mess in Massachusetts shows why Social Security and Medicare have survived over the decades. Both programs rely on dedicated payroll taxes that everyone pays, giving everyone a stake in the program. Sure, they’ve had some funding problems along the way—but these problems have always been fixed, and most neutral experts believe they can be fixed again. FDR knew that payroll taxes were as much a matter of politics as of economics and later proclaimed: “With those taxes in there, no damn politician can ever scrap my Social Security program.” So far, no one has.

If the president would ask the Congressional Budget Office’s opinion of a dual systems, public/private solution’s, advantages over all other health care reform proposals, how many hundreds of billions of dollars of federal tax savings would be realized each year with these changes in place, what would be the dollar values of the economic stimulus added each year to our national economy, and what would be the total annual dollar values of the economic savings realized by individuals and businesses that would then become discretionary spend able income if this dual choice system were in place, the President could avoid the train wreck his proposal is headed for.
A dual public/private health care reform system has no equals or even a close contender to provide a world class solution for reform that could suubstantially lower Medicare, Medicaid and all government funded health care costs.
Using governments “unfair advantages” is the way to bring rapid “game changing” innovations and reforms to health care.
A new public health service could provide:
Free care and medications to everyone choosing to use public care, rich, poor, old, young, everybody that asks for it could have it no insurance or co pays would be required the service would be free period.
Businesses that would choose the public health care service for their employees would no longer be required to pay for or be involved in health care in any way.
Costs to citizens for this new public health care system even after bringing in 50 million people currently outside of any system, paying all costs for seniors who would chose to use this totally free public service instead of the complicated doughnut hole infested Medicare mumbo jumbo, and caring for everyone else who wanted to drop what they are paying for and use free public care, the costs for all of this when delivered efficiently through a new civilian VA style system, proven and fine tuned through years of use, would still be hundreds of billions of dollars cheaper than the $2.5trillion spent last year.
Nobody can collect the money to pay for health care as cheaply as the government can through a national sales tax, as opposed to forcing individuals and businesses to purchase questionable insurance to pay for expensive services in a system that has failed so many, and nobody can deliver high quality care and medications as cost effectively as the VA has for years.
A civilian model of the VA is the best fix in a new dual public/private system.
If private systems work for you keep doing what you’re doing except no government funding should be spent through private systems in order to control costs and outcomes.
Using a dedicated national sales tax funding source in conjunction with the VA's delivery and software records systems means we don’t need to reinvent the wheel.
The system could be jump started by acquiring health delivery systems around the country that would choose to sell to, and be integrated into, the new public National Health Care System.
A national health care system could also take over states and local government’s health care systems to assure VA operating standards and relieve local funding problems while providing total transferability for patients.
Building new public health care facilities will produce capital assets that will continue to serve Americans for generations, and provide millions of construction jobs today and millions of new health care jobs forever.
The private care option would allow individuals or businesses the unlimited choice of doctors, clinics, hospitals, timing, and treatments, Ford Fiesta or Rolls-Royce, but it would require the user to pay privately for their health services, either by self pay, company pay, private insurance, whatever, but government funded programs should only be distributed through the new national system to assure cost control and outco
#1 Posted by Bill Watson, CJR on Tue 21 Jul 2009 at 10:36 PM
You keep using the word "free." As this article so aptly demonstrates, there is nothing in this that's "free." Somebody is going to pay something somewhere. What program has the federal goverment done that hasn't become a fiasco due to its mishandling?
#2 Posted by Irene, CJR on Fri 24 Jul 2009 at 01:54 PM
You make many excellent points about Massachusetts. But perhaps one of the most important developments is this from WSJ last week:
"A Massachusetts commission yesterday recommended that the state shift its payment method from the ubiquitous “fee for service” formula to one where health-care providers would be grouped into networks and paid a flat monthly or annual fee."
http://blogs.wsj.com/health/2009/07/17/mass-panel-end-fee-for-service-payments-for-doctors/
It will be fascinating to see what happens. The doctor's and insurers in Massachusetts are extremely powerful. But apparently they are pricing themselves out of their own market. Instead of health care for everyone, we will likely end up with a situation where the rich can get anything they want (for a high price) and the poor are, as usual out of luck.
This is also the way the country will go until this issue of how doctor's and insurers are paid is dealt with up front.
Patients too need to step up to the plate, take responsibility, and start getting involved in their own care. No one cares more about your health than you do. So act like you care. Follow your doctor's recommendations and now that you can, check that your health care providers offer quality care and value. Don't be "part of the problem."
#3 Posted by HealthDame, CJR on Fri 24 Jul 2009 at 04:34 PM
Thank you, Ms Lieberman, for your deep exploration of the Massachusetts health insurance mandate.
This health insurance law should be proof to the rest of the country that as long as a profit motivated, commercial business model remains, there will be no reform. Likewise, as long as the words "health care" remain synonymous with "health insurance" there be no reform.
Although publicly vaunted as a vehicle to promote universal health care, the Massachusetts plan was expressly designed to ensure universal, for-profit insurance, not medical care. As with all health insurance models, you have shown the goal of the Massachusetts law is to reduce medical care and to maximize corporate earnings.
The Massachusetts plan is also intent on maintaining employer-based coverage, despite this system's innate fiscal shortsightedness, complications and waste. Rather than reforming the delivery of medical care, the Massachusetts law created nineteen new state agencies and relies on a many levels of tangled bureaucracy to maintain it.
The word reform means to change for the better or straighten out. Neither of these can occur until the idea of reform is taken for what it truly means and a simplified national single payer system is adopted. The money that is not spent on profit, waste and bureaucracy would more than cover the cost of real reform. This commonsense outlook is sadly buried by those who would lose by its adoption. As evidenced by the Massachusetts experience, fake reform is a painful means to a crushing end.
Please see www.masshealthlawtruth.org for more in depth information.
Let's not let 'em stick it to us.
#4 Posted by RPR, CJR on Sat 25 Jul 2009 at 12:09 PM