Sunday’s New York Times piece comparing the records of GOP presidential candidates Mitt Romney, Rick Perry, and Jon Huntsman on the topic of health reform was a fairly ho-hum recitation of what the three men did as governors of their respective states. Romney gave his blessing to a law requiring Massachusetts residents to carry insurance, but one that does next to nothing to control costs. Perry presided over a state with the highest proportion of uninsured people in the country, and his much-ballyhooed malpractice reforms look like they’ve backfired. During Huntsman’s regime in Utah there was talk of a mandate, but one was never enacted.
The story waxed on about Romney’s success in getting more people covered with health insurance. “Romney is batting .500,” the Times reported. About 98 percent of the state’s residents have insurance, and the number of employers contributing to their workers insurance rose since Romney’s reforms were enacted—generally a good thing. Then came a graph that stopped me cold. It was as though the reporter or editors did not want to emphasize there was a blemish on this happy picture in the Bay State. The graph read:
But the law was not intended to make a serious assault on the state’s above-average health costs. A recent state report concluded that growth in private insurance premiums since 2006 had outpaced the increase in national health care spending.
Above-average health care costs? What kind of sugar-coating is that? So I rang up Alan Sager, a professor of health policy at Boston University’s School of Public Health and an expert on the state’s health care spending. “We don’t have above average costs,” he told me. “They are the highest in the world. Massachusetts has the highest costs in the nation, and the U.S. has the highest costs in the world. To say they are above average trivializes the problem.”
Sager explained that half of the difference between what the U.S. spends on health care per person and what Massachusetts spends can be attributed to hospital care. Massachusetts hospitals have what Sager calls “an elaborate and expensive pattern of care.” According to 2009 data from the American Hospital Association, the state’s hospital costs are 56 percent above the U.S. average, higher than any other state.
The graph cited a recent state report which compared insurance premiums since 2006 to increases in national health spending. The paper did not identify the report’s authors. I recalled one recent study by the state’s attorney general, Martha Coakley, which found that the state’s most discussed remedy for reducing the cost of medical care—global payments which give providers a single payment to cover all of a patients’ needs—did not lower costs, but in fact increased them. Coakley’s findings prompted WBUR to call Coakley’s report a “health reform bombshell.”
While premiums in general correspond with health care spending, I wanted to know who produced the study the Times mentioned so fleetingly, and I wanted to understand what they meant by the vague word “outpaced.” Specifically, how much have premiums increased in Massachusetts since the reform law passed? I remembered an eye-opening story earlier this summer in the Boston Herald by health reporter Christine McConville that got into this topic. She reported about a phone interview she had with the state’s Inspector General, Gregory Sullivan. Sullivan told her that the average family in the state was spending about $11,000 for coverage five years ago when the law was passed. That average family is now spending around $17,000, and five years from now the premiums will be around $25,000 a year. Sullivan told McConville that “we’ve studied the data and looked at the trends and it’s really frightening. If we don’t tackle it, it will break Massachusetts.” Those kinds of comparisons were missing from the Times’s account.
I checked in with McConville, who pointed me in the direction of an Inspector General’s report (pdf) that raised questions about the state’s insurance regulation, as well as the effectiveness of global payments.