fortune magazines take on MA and federal healthcare

i know, i know, i seem to be harping on the comparison between the massachusetts and federal healthcare designs lately. but fortune magazine wrote a great summary of lessons to be learned from massachusetts.

Lesson 1: The Massachusetts plan does not control costs.

When Massachusetts launched its reform program in 2006, it already had the highest medical costs in the nation. Today, the burden is still rising far faster than wages or inflation, from those already lofty levels.

Lesson 2: Community rating, guaranteed issue and mandated benefits swell costs.

Under guaranteed issue, insurers must accept all enrollees regardless of their medical condition; under community rating, they must charge all customers similar premiums, even if their costs are far different. The result is that prices rise steeply for young, healthy customers, who must pay far more than their actual costs. It also give them a strong incentive to drop insurance; then, they can "game the system" by signing up anytime they need surgery or get diabetes.

Lesson 3: Huge subsidies for low-to-medium earners could prove extremely expensive.

And surprisingly, the federal plans would probably prove a lot more costly than the ones in Massachusetts, where the state prides itself on restraining what they pay by squeezing providers, who then shift the added costs to private customers.

Lesson 4: The exchanges reward people for working less and earning less.

But it's clear in Massachusetts that low-to-medium earning families often suffer financially if they get a raise, work overtime, move to a higher paying job -- or if a spouse rejoins the workforce.

Lesson 5: The generous plans and added mandates give employers an incentive to drop health insurance.

The problem is simple: If employers stop paying for health care, employees will flood into the government-subsidized programs, enormously raising the cost to already fragile budgets.

i promise a new topic next time. im really getting into to the world cup so maybe something in that direction.

GO CELTICS!!!

MA healthcare premiums rising

just a quick post today.

at the risk of beating an issue into the ground, here are some figures from todays boston globe regarding the rising cost of healthcare in massachusetts. again recall that the massachusetts healthcare system is generally what the federal plan used as a model.

so how does this sytem control health costs again?

healthcare already costs more!

how long has it been since the healthcare reform bill was signed into law...7 weeks? and now we hear from the CBO a revised estimate about the cost. yup, the CBO underestimated the costs in their original report and are now saying it will be $115 billion more costly.

Congressional Budget Office estimates released Tuesday predict the health care overhaul will likely cost about $115 billion more in discretionary spending over ten years than the original cost projections.

The additional spending — if approved over the years by Congress — would bring the total estimated cost of the overhaul to over $1 trillion.

we havent even implemented this reform yet. how many more times do you think this estimate will be revised? mrs pelosi was right, we did need to pass the bill in order to see what was in it.

health care reform and cost containment

since congress continues to dither with if, when and how they plan on passing the health care reform bill, lets dive back into it. in doing some research i came across some interesting figures in regards to costs of existing programs. this highlights why i believe that any kind of reform to the system needs to have cost controls in place.

united kingdom's national health service
when this program was created in 1946 to provide free health care to all citizens, it was estimated to cost ₤260 million. the actual cost turned out to be ₤358 million.

medicare - hospital insurance
this is the part A portion of medicare and when created in 1965 it was estimated to cost $9 billion in 1990. the actual costs in 1990 turned out to be $67 billion.

medicare - the entire program
in 1967 it was estimated that this entire program would cost the US taxpayer $12 billion. by the time 1990 rolled around, it actually cost $110 billion.

massachusetts commonwealth care
this is the most recent example and has been shown as a model for how health care reform could work on a national level. i say, its an example of how out of control the costs could get on a national level. the program started in 2006 and the estimated cost for 2008 was $472 million. it actually cost $628 million.


and what happens when the actual costs exceed the estimates? either you can increase taxes and continue to find the money to fund the program or certain individuals or services need to be cut. i know it makes some people furious to say this, but the second option is called rationing of care. heres a somewhat chilling quote from the british health minister when faced with this exact situation:

If the present [budget] estimates are not to be exceeded, services must be withheld which the community has proved it urgently needs—dental treatment and spectacles must be refused, beds must be closed, staff dismissed, and waiting lists already appallingly long must grow even longer. I do not think my colleagues will wish this to happen; I hope they will share my view that the additional money must be found to prevent its happening. But if they do not, I shall need their assistance in determining which services should be withheld and which developments cancelled.

how about one more? i will keep it local but use a non-healthcare related example. The Big Dig. this project essentially moved the bridge through downtown boston into a tunnel under the city. it was estimated to cost $2.6 billion. it ended up costing $22 billion. and the ceiling tiles fall down and kill people.


which leads us to todays debate. we are told by the president and congress that this health care reform bill will costs the taxpayer in the neighborhood of $1 trillion over the next 10 years. based on the historical evidence, do you think this reform will cost more or less than $1 trillion? we know the answer already. without cost containment it will cost more than predicted, it will continue to grow and it will never go unfunded.