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ACA Fail Fractal
Huge Romneycare Waste Hints at ACA Costs

A Massachusetts health care commission has found that one-third of state health care spending is wasted on inefficient medical procedures. The WSJ has more:

Main drivers of excess spending included patients returning to hospitals for preventable reasons and emergency-room visits that better primary care could have warded off, the state’s Health Policy Commission concluded, citing 2012 data. The commission estimated between $14.7 billion and $26.9 billion in wasteful spending that year, representing between 21% and 39% of total health expenditures.

Massachusetts’ Romneycare was, of course, a model for the Affordable Care Act, and the data about ER use in that state only adds to the growing evidence that national costs could increase as ACA insurance goes into effect. One of the biggest talking points for health care reform is that the US spends much more on health care than other countries, but has worse health statistics, and the financial waste in our system is always identified as a big cause of our inflated spending.

But at the same time this report has come out, Massachusetts has taken a step towards a measure that actually could reduce costs. Fierce Price Management reports that health care price transparency became law in the state on January 1st, after provisions of 2012 goes into effect. This is the kind of reform that actually can reduce costs, and something that you would think a state would want to put into place before embarking on top-down reorganizations.

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  • sean_parnell

    Note that this comes on top of the recent Oregon study showing Medicaid patients were more likely to visit the ER than the uninsured.

    And I don’t know offhand the specifics of the Massachusetts price transparency law, but as an advocate for real, transparent prices I can tell you I’m skeptical of the ability of laws that try to impose a government-defined version of transparency (see my thoughts here:

    In short, real markets can facilitate price transparency, government edict not so much.

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