What Difference Has RomneyCare Made?
Most conservative critics of the Massachusetts health reform have focused on any piece of bad news about the program they can find. After all, if this is the model for the federal legislation everyone calls “ObamaCare” it’s got to have a lot of defects. Right?
Not so fast. The real story coming out of Massachusetts is that the whole thing is a yawner. Health reform in the Bay State has been mainly about money: who writes the checks and who cashes them. That shouldn’t be a surprise. That’s usually what health reform is about. But what about the effect on patients? As it turns out, there has been very little change at all.
Does that mean that health reform at the federal level might also be benign? I wish. Unfortunately, ObamaCare introduces new and dangerous distortions that you don’t find in Massachusetts — partly because states don’t have the same powers as the federal government. More about that below.
On paper, it looks as though the state has made major progress in insuring the uninsured. From 6.4% of the population in 2006, the uninsured hover around 2% today. However, one study found that nearly all of the newly insured are either on Medicaid, in a state-subsidized plan or in an employer subsidized plan. Only 7% of the newly insured, or about 30,000 people, are directly paying their own way. It’s relatively easy to get people to sign up for insurance when coverage is free or almost free. And it’s not very expensive if you pay for the subsidies using money you would have spent anyway on free care for those who can’t pay their medical bills.
But aside from moving money from one bucket to another, have any real problems been solved? The evidence isn’t positive.
There are three major problems in health care all over the world: cost, quality and access. Since nothing in the Massachusetts reform addressed the problems of rising costs and less than adequate quality, those problems have remained more or less unchanged. What about access to care? Surely, newly insured people have more options in the medical marketplace.
The trouble is that almost all of the newly insured are in health plans that pay doctors and hospitals a lot less than what private insurance pays. Like other places around the country, Massachusetts Medicaid (called MassHealth) pays providers so little that patients often turn to hospital emergency rooms and community health centers for their care when they can’t find doctors who will see them. People in the newly subsidized private insurance plans aren’t faring much better because these plans pay only slightly more than what Medicaid pays.
The only solid analysis of what has actually happened to patients at this point is a study by Sharon Long and Paul Masi published in the journal Health Affairs. According to the study:
- There has been no significant change in the number of Massachusetts patients seeking care in hospital emergency rooms since the reform was implemented, and there has actually been an increase in emergency room use by people with incomes below 300% of the poverty level.
- There has been an increase in doctor visits but no change in visits to specialists and an actual decrease in “medical tests, treatment and follow up care,” which I assume is care for the chronically ill.
- There has been no change in the percent of the population reporting a failure to “get needed care for any reason within the past 12 months” and remarkably that includes one-third of those with incomes below 300% of the poverty level.
The problem with counting up doctor visits is that a visit is not always a visit. Nationally, in the state children’s health insurance program (CHIP) doctors have responded to an increase in the demand for their services by scheduling more appointments, but spending less time with patients. Also, you would think that the Massachusetts reform would shift health care resources from the general population to those with less income. But there is no evidence that has happened. On measures of access, the gap between the poor plus the near poor and everyone else appears not to have changed at all!
Ask yourself why you care whether other people have health insurance? The most likely reason is that you want people to have access to health care. But lack of access to care is a huge problem in Massachusetts right now. As I previously reported more than half of all family doctors and more than half of all internists are not accepting new patients. The wait is more than a month before a new patient is able to see a family doctor, and the wait to see an internist averages 48 days. The average wait in Boston to see a family doctor is more than two months.
What I am now reporting will be different than what you may have read in the newspapers or at other health blogs. MIT Professor Jon Gruber calls Massachusetts an unqualified success, citing some of the very same studies I am citing. But since Gruber was one of the architects of the Massachusetts health reform, this is like a student grading his own exam. NCPA senior fellow Devon Herrick has shown that Gruber sorted through the evidence, cherry-picked what he liked, and ignored everything else.
What about elevating the Massachusetts reforms to the national level in the form of ObamaCare? As I have previously reported, ObamaCare is likely to result in less access to care for our most vulnerable populations: the disabled and the elderly on Medicare, the poor on Medicaid and the near poor in newly subsidized private insurance. But that is only the beginning.
ObamaCare threatens a federal takeover of the practice of medicine. It threatens to cost millions of people their jobs. It threatens to cause a wasteful restructuring of American industry in a way that will make us less efficient and less competitive in the international marketplace. It will cause millions to lose their employer sponsored insurance. And it threatens to create health plans with perverse incentives to underprovide care to the patients most in need of the miracles of modern medical science.
ObamaCare will be anything but benign.
Excellent post. Best thing I have read about the Massachusetts health reform.
Best solution: Let Massachusetts keep RomneyCare and repeal ObamaCare.
One aspect of the Affordable Care Act that is really scary is the perverse incentives for employers to drop coverage and send their workers into the Health Insurance Exchange. Using Kaiser’s subsidy calculator, I found instances where older workers earning $90,000 per year (living in high cost regions) would qualify for a subsidy of nearly $15,000 in the Exchange compared to maybe $6,000 if coverage is obtain through an employer (for an older, low-income worker the subsidy would be worth about $18,000 more in the Exchange).
Small employers would be exempt from the penalty for not offering coverage. Large employers could pay a fine of $2,000. Since the cost of employee health plans are part of compensation, employers could dump the employee plan, pay the fine and boost workers’ wages. Firms that do this will have a competitive advantage over firms that don’t.
Nearly 50% of all workers are in families that will qualify for some type of subsidized coverage. That’s too big a percentage of the workforce for this not to become a problem.
Interesting take. But I like it. RomneyCare is a yawner.
John, I think you are the first person to say that RomenyCare has made very little difference.
Very interesting, as usual! Good post.
Devon is on target with his comments regarding employers dropping their coverage and sending employees to the exchange. My firm works with mid-market employers (200 to 5,000 employees)throughout the country. At least half have indicated that they would strongly consider dropping their plan in 2014. By 2017 the only employers offering medical coverage will be Fortune 500 companies. Attrition will result in a single payor plan.
Don’t forget that since RomneyCare uses money which previously went to hospitals under the DSH (Disproportionate Share Hospital) program in order to fund insurance subsidies, safety net hospitals in Massachusetts are under a bigger financial strain.
http://commonhealth.wbur.org/2010/09/safety-net-hospitals-hope/
http://www.boston.com/business/healthcare/articles/2008/03/18/safety_net_hospitals_strained_by_reform/
As a MA small business owner who shops for plans, and as an individual MA patient with some chronic health issues… The facts John included in his post sound accurate enough, but I see them as a very BAD result — not a ‘yawner’ or ‘no difference’. Insurance costs have gone up, benefits down. Many employers have been forced to raise deductibles by thousands of dollars per individual, just to keep the premium increases somewhat manageable; this might have been a worthwhile shift, if premiums actually went down, but I’ve seen them up by ~25% per year in MA, despite big deductibles. There is also LESS choice in plans, due to government mandates on what types of coverages are required; i.e. all plans are similarly expensive; and state-mandated ‘connector’ plans from the same providers cost more, not less. There are longer wait times for care, less choice in selecting providers and treatments (tiers, etc.), doctors more frustrated to practice here, more drains on the system from illegal immgrants (and state-sponsored medical tourism from poor countries). Lest I forget this minor (?) point, there is no sign that the quality of care is actually improved by any of the government measures. (Except perhaps the mandate for pre-existing conditions being covered, with insurance continuity…but that didn’t require Romneycare.) And now our state is going bankrupt over the giant added costs, the state sales tax was raised already, and what is next? All in all, this seems far WORSE with Romneycare than without…not that I blame Romney so much…it is a statehouse full of liberals; he went along to get along, I think, as he often has. I agree it isn’t nearly as bad as what the national Obamacare calamity could do, but it is pretty bad in MA, just the same.
P.S. Massachusetts also went through over-regulation of AUTO insurance in the past. When the state finally repealed most of those regulations and mandates a couple years ago, my car insurance premiums (for the SAME coverage) dropped by about 30% almost overnight, due to the increased competition and choice.
Competition and choice — two things that will be missing in Obamacare. The thought of the full implementation of the plan scares me to death.(oh, wait, maybe the Congress thinks scaring people to death is good — less on the health rolls!)
Mr Weber, at the same time that your premiums were increasing so were the net incomes of the hospitals in the Boston area. They were not required to reduce their prices and now they cannot hide behind the excuse that treating all of the uninsured causes the ridiculous cost shifting to employers with insurance.
@ Jon Weban
Thanks for giving us that report from the front lines.
Everyone has posted excellent comments!
I can’t add much except to say that I’m glad MA is the state conducting the grand experiment and not Texas!
Thanks, John and Jon.