Massachusetts goes for rationing? Update: Incentivizing profit over care?

posted at 12:15 pm on October 12, 2009 by Ed Morrissey

The Massachusetts adventure in health-care reform will take an entirely predictable turn in the near future, say providers within the network.  The state panel intends to dictate a narrower network of providers for some insurance plans, which providers insist will result in a reduction of services to patients in hospitals and clinics.  Massachusetts wants its citizens to choose second-tier hospitals and clinics to save costs, and plans to eliminate choice as a means to that end (via Instapundit):

The state’s ambitious plan to shake up how providers are paid could have a hidden price for patients: Controlling Massachusetts’ soaring medical costs, many health care leaders believe, may require residents to give up their nearly unlimited freedom to go to any hospital and specialist they want.

Efforts to keep patients in a defined provider network, or direct them to lower-cost hospitals could be unpopular, especially in a state where more than 40 percent of hospital care is provided in expensive academic medical centers and where many insurance policies allow patients access to large numbers of providers.

But a growing number of hospital officials and physician lead ers warn that the new payment system proposed by a state commission would not work without restrictions on where patients receive care – an issue some providers say the commission and the Patrick administration have glossed over.

“You can’t reap these savings without limiting patients’ choices in some way,’’ said Paul Levy, chief executive of Beth Israel Deaconess Medical Center. “It’s a huge issue, it’s huge.’’ Dr. James Mongan, president of Partners HealthCare, a Beth Israel Deaconess competitor, agreed that it wouldn’t “work without some restriction on choice.’’

Remember this every time Barack Obama and Democrats insist that we can keep our doctors and our hospitals if we like them, or that ObamaCare will not limit patient choice.  The end result of state intervention and price fixing is always higher costs, followed by rationing.  Insurance companies at least have competitive pressures keeping them efficient, but when prices get fixed by the state, that efficiency goes out the window.  As costs escalate, the state intervenes in other ways to keep subsidies from skyrocketing, and this is the inevitable result.

The other option is to cut payments to the premier hospitals, which will force them to take fewer patients.  The result of that approach will be very easy to predict.  The best hospitals will take primarily those patients who can afford to pay their premium prices, leaving the poor and middle-class patients to get treated elsewhere.  It will stratify health care much more than before Massachusetts enacted its “reforms”, giving the rich almost exclusive access to the best care.  And thanks to lousy compensation rates, fewer new providers will be around to meet the new demand in second-tier care, meaning much longer wait times for the poor and middle-class patients.

This is a microcosm of what we can expect on a national basis if ObamaCare gets enacted.  Will the media start reporting this in that context?

Update: Paul Hsieh, a physician himself, notes the curious incentive being applied by Massachusetts:

What the supporters don’t mention is that it also creates a tremendous incentive for physicians and hospitals to render as little care as possible. Under the Massachusetts proposal, if your care costs less than the annual allotment, then they keep the unused portion. If your care costs more, then the difference comes out of the providers’ pockets. Such a system thus pits your doctor’s interests against your own.

For the sake of argument, suppose your annual allotment is $5000 and you’ve already spent $4500 for that year. Now you go to your doctor’s office complaining of a severe headache. He examines you and says, “No, Bill, you don’t need a $1000 MRI scan of your brain. Just take two Tylenol and call me in the morning”.

Will you be 100% sure that he’s giving you unbiased medical advice?

And even if your doctor consistently and conscientiously acts for his patients’ best interests, he will inevitably find himself at odds with hospital administrators questioning whether this or that expenditure is appropriate[.]

Read the whole post.


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Comment pages: 1 2 3

And thanks to lousy compensation rates, fewer new providers will be around to meet the new demand in second-tier care, meaning much longer wait times for the poor and middle-class patients.

You are describing first-tier care in Britain’s NHS.

unclesmrgol on October 12, 2009 at 10:43 PM

IMHO, that case lies somewhere between the Darwin awards and willing victims of questionable medical practice.

Dark-Star on October 12, 2009 at 10:03 PM

Darwin awards…

….Heh!

Now that is the perfect tag for an Obama voter.

Saltysam on October 12, 2009 at 10:48 PM

Notice it was Ed that posted this and not AP.

technopeasant on October 12, 2009 at 5:54 PM

Mmm-hmmm.

Saltysam on October 12, 2009 at 10:55 PM

Controlling Massachusetts’ soaring medical costs, many health care leaders believe, may require residents to give up their nearly unlimited freedom to go to any hospital and specialist they want.

Will this help to restrict people from traveling? Y’know, communist countries greatly restrict travel also.

JakeRightThought on October 12, 2009 at 10:59 PM

The problem with the healthcare reform in MA is not the plan, but the people running the plan.

It’s like that old saying “Gun’s don’t kill people, people kill people.”

The MA plan is being run by liberal democrats and a liberal democrat of a governor that is on his way out in the 2010 elections.

The next governor who appears according to the polls to be Charles Baker, the former CEO of Harvard Pilgrim, will implement the plan as it was originally intended by utilizing more choice and a host of other tools to lower the cost of healthcare.

Please note the link:

http://www.charliebaker2010.com/10questions.html

SED on October 12, 2009 at 11:25 PM

Controlling Massachusetts’ soaring medical costs, many health care leaders believe, may require residents to give up their nearly unlimited freedom to go to any hospital and specialist they want.

You mean they can go wherever they want and the true cost is transparent to the customer? Whoda thunk that they would all go to the best hospitals and specialists? Amazing, its almost like human nature or something.

And these big government libs just keep telling us that no, health care “reform” will work, people don’t respond to incentives.

2ipa on October 12, 2009 at 11:57 PM

The problem with the healthcare reform in MA is not the plan, but the people running the plan.

The MA plan is being run by liberal democrats and a liberal democrat of a governor

Good thing that wouldn’t be the case with Obamacare.

Wait…

Terry_Dyne on October 13, 2009 at 1:33 AM

The problem with the healthcare reform in MA is not the plan, but the people running the plan.

It doesn’t matter who is currently running the plan, or who will run it later. When you have government dictacting to the people that they must carry insurance the door is now open for cost to get out of control and then rationing to start. Government involvment is never the answer, rather it is the problem. The only thing the government should do is go over its laws and regulations to see where it all went wrong and remove those laws and regulations.

TQM38a on October 13, 2009 at 9:21 AM

“The end result of state intervention and price fixing is always higher costs, followed by rationing.”

Just like what is already happening in Canada.

rightsideupinthegwn on October 13, 2009 at 12:21 PM

Comment pages: 1 2 3