A New Study: Massachusetts Health Reform Has Failed

 Stanley Feld M.D., FACP,MACE

 Physicians for a National Health Program have been advocates of a single party payer for a while. Public Citizen has been an advocate for a longer period of time. Sidney Wolfe M.D. is the healthcare director for Public Citizen. I have had difficulty agreeing with the position of both in the past. I agree with the conclusion of this study. I do not agree with its solution.

Both groups have declared the Massachusetts health care system a failure.
“In a study released Wednesday, two organizations (Physicians for a National Health Program and Public Citizen) say the Massachusetts health system is a failure and national policymakers should not look to that model as a possible solution". Instead, they propose a single-payer "Medicare for all" system as a better alternative.”

I do not agree with their conclusion of “Medicare for all” in Medicare’s present form. Why would anyone replace one failed system with another failed system? I would rather understand why both systems failed and then fix the reasons for the failure.

 “Massachusetts' healthcare reform, which included an individual mandate that required residents to purchase insurance, has increased coverage, but critics charge that the plan has not decreased costs or improved access to care."

"PNHP and Public Citizen have charged the Massachusetts project has not covered as many people as claimed, not contained costs, and hurt safety-net providers like public hospitals and community clinics.”

“In fact, the individual mandate is merely a "new tax on the uninsured," according to the study.”

 They should have concluded the healthcare plan was written for the advantage of the healthcare insurance industry by politicians who did not understand it. The result is a great cost to the state of Massachusetts and its individual citizens

"We are facing a healthcare crisis in this country because private insurers are driving up costs with unnecessary overhead, bloated executive salaries, and an unquenchable quest for profits–all at the expense of American consumers," says Sidney Wolfe, MD, director of Public Citizen's Health Research Group in Washington, DC.

Sidney Wolfe has developed many effective sound bites. He is a compelling voice for Public Citizen. He believes what he says. I have found over the years that his criticisms are compelling but his solutions are weak.
"Massachusetts' failed attempt at reform is little more than a repeat of experiments that haven't worked in other states. To repeat that model on a national scale would be nothing short of Einstein's definition of insanity."

It was pretty obvious that the Massachusetts plan did not address healthcare insurers overhead. The plan was destined to increase premiums. It did not create price competition among insurers or hospital systems.The healthcare insurance companies control the healthcare dollars and the more people insured the more money they make.

“ In the study, the two groups said the individual mandate meant more business for health insurers, but didn't address administrative costs associated with private health insurance. In fact, the Massachusetts Connector, which was created to promote the program and help link people to the health plan options, adds 4-5 percentage points to private insurer policies, according to the study.”

 Massachusetts healthcare official have been forced to be defensive in claiming the program is a success as it is going down in flames as stated in my last blog entry.

“Jon Kingsdale, executive director of the Massachusetts Connector level of uninsured is consistent with the stated goal of health reform to achieve near-universal coverage and is only a point or so above the uninsurance rates reported by many European countries with so-called universal access."

 The study's authors claim healthcare costs will increase from $1.1 billion in fiscal 2008 $1.3 billion in fiscal 2009. It was suppose to cost 487 million dollars.

They claim, “If the state had created a public single-payer system, it could save about $8-$10 billion annually through reduced insurer administrative costs, which could go to covering uninsured residents and improving coverage for those with health insurance, according to the study.”


My first criticism of the comment is the numbers quoted do not match. Second Massachusetts outsources the administrative services at a 15% premium to the healthcare insurance industry. Medicare claims a 2% overhead.

Medicare also outsources administrative services to the healthcare insurance industry. Even though Medicare’s overhead is 2%, the healthcare insurance industry builds the additional 15% into its fees. Medicare’s total overhead is 17%. The overhead is obscene.

This abuse will not be solved by a single party payer. It will only be solved by the ideal medical saving account.

The opinions expressed in the blog “Repairing the Healthcare System” are, mine and mine alone.