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Romneycare Falters in Massachusetts


Pundits on both sides of the political spectrum have noted that health care outcomes in Massachusetts are among the best indicators for Obamacare that we have, given the ACA’s similarity to Romneycare. Now a new study is out on MA health care, and it doesn’t paint a pretty picture:

A state report says Bay State premiums rose 9.7 percent between 2009 and 2011, while the value of that coverage shrank 5.1 percent.

“What we’ve seen over the last couple of years is that premiums are growing faster than inflation and at the same time, the quality of the benefit is declining,” said Aron Boros, whose state agency, the Center for Health Information and Analysis, published the report. “So you’re not only paying more, you’re getting less.”

A leading driver of this disturbing trend is consumer preference for expensive hospitals over local clinics or basic care facilities. And this, in turn, can be traced to perhaps the central distortion of our system: the lack of price signals. When consumers aren’t confronted with the real cost of their care—whether because insurance obscures it, or for other reasons—they won’t balk at high price tags, and the system will continue to get more and more expensive. They’ll visit expensive hospitals unnecessarily, simply because they don’t have any financial reason to consume services more responsibly.

In other words, Romneycare isn’t causing the increasing cost-quality mismatch; it’s simply letting that mismatch fester by not addressing the core problems bankrupting our health care system. As for Obamacare, while some of its provisions will increase costs directly by expanding access and defining essential benefits, the bigger problem is that the law doesn’t even try to address the real areas that need reform.

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  • Dennis Byron

    It’s hard to believe the author of this post read the Massachusetts report. The report was basically about healthcare insurance costs and healthcare costs in general, not health care. Our health care here in Massachusetts is great.

    And careful reading of the health care cowst report shows that the major cost driver is not the use of teaching hospitals or poor negotiating position of insurers or any of the other spin the central planners quoted above want you to believe. According to the report, about 10% of the insurer’s expenses were spent on implementing RomneyCare (a complete waste because RomneyCare was effectively repealed in 2012) and implementing Obamacare.

  • Jacksonian_Libertarian

    Without the consumer shopping for better prices and value (this is the heart of free market success), nothing ever gets any better. Health Insurance of any kind that divorces the consumer from the economic pain of his choices, reduces the efficiency of the Healthcare market. As long as someone else is paying (Health insurance, Government, etc…), the efficiency and quality of our healthcare will continue to decline.
    We will know that we have the best healthcare possible when Doctors and Hospitals are advertising their prices for doctor visits and basic procedures, in order to get more paying customers.

  • wigwag

    “A leading driver of this disturbing trend is consumer preference for expensive hospitals over local clinics or basic care facilities.” (Via Meadia)

    Actually the “expensive” hospitals, which in the case of Massachusetts are mostly teaching hospitals (which means they train new physicians in residency programs), deliver significantly better outcomes for a large number of procedures. Yes they are more expensive, but they deliver superior health care for many different conditions.

    Everyone who is sick wants the best treatment available; the question for society is whether we want to limit the best treatment available to people wealthy enough to afford it.

    You can have your coronary artery bypass graft at Cape Cod hospital if you want to; it is cheaper than getting it done at MGH. But if you make that choice its not your heart that’s your real problem, its your brain.

    But I understand; Professor Mead, with great health insurance underwritten by the tuition paying students at Bard thinks that people like him should be able to get their surgery at the best hospitals while poor shnooks who can only afford bargain basement prices should check into a clinic at Walmart for their cardiac surgery.

    • Jim__L

      Wigwag, how do you propose that we create a medical system where all the doctors are above average?

  • Jim__L

    Small local clinics with low overhead = good.

    Large, anonymous, Walgreens-type companies that can survive a malpractice scandal if they give the wrong vaccine to kids = not so good.

    • rheddles

      Small local stores with high prices=good.

      Large, anonymous, low cost Walgreens-type companies that can afford insurance for inevitable mistakes that are probably more likely at ill trained local clinic= bad.


  • Corlyss

    “What we’ve seen over the last couple of years is that premiums are growing faster than inflation and at the same time, the quality of the benefit is declining.”

    Even a superficial familiarity with economic principles would have told the average voter, you know, the ones BP keeps telling us re-elected the doofus, that you can’t spread the same amount of resources over millions more and everyone keep the same size slice of the pie as they had before. Anyone who’s ever had to feed unexpected guests from a meager larder gets that. But the people who elected Obama certainly can’t be accused of deep familiarity with either economics, public policy, or issues facing the nation. Apparently they believe that if we all hold hands and wish really hard, we can revive Tinkerbell. Psychologists call this “magical thinking.”

    • Andrew Jones

      its funny how conservatives comment as if they haven’t even read the article. I’m guessing at least a few read the headline and then went straight to write their juvenile & insulting post. Actually when there is as much waste in a system as there is in ours, you CAN use resources more efficiently without sacrificing quality. The author says clearly that the rise in premiums and decrease in care is not due to Romney-care, only that Romney-care hasn’t addressed the “lack of price signals.” Considering that HC providers (profoundly over)price things in the dark, this issue is obviously not caused by any recent legislation. It does, however, cut down on freeloaders on the system using the ER as their primary HC provider, which is also vastly cheaper. I know, I know, anything more complex than a kindergarten truism falls on deaf tea party ears.

  • Boritz

    The political class is completely glad they did this in MA and now the nation and would be tickled with what they have done even if it were five times worse which it may prove to be.

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