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Mass Healthcare Reform's Success Comes From 'Shared Responsibility'

Les Masterson, for HealthLeaders Media, May 27, 2009

Critics of the Massachusetts healthcare reform charge that the program has not kept costs under control and simply forces Bay Staters to get health insurance, which results in more customers for health insurers.

However, a new report released this month shows the state's costs to fund the reform "has been relatively modest and well within early projections." Massachusetts' health reform's "shared participation" has reduced the number of uninsured residents while having "a marginal impact on state spending," according to the report, Massachusetts Health Reform: The Myth of Uncontrolled Costs.

The Massachusetts Taxpayers Foundation report found that the state's health reform spending will grow by a projected $707 million between fiscal 2006 and fiscal 2010—half of which is being supported by federal reimbursements. So, in fact, the state has paid an extra $353 million or $88 million annually for health reform while adding more than 432,000 residents to health insurance, according to the report.

The program's hallmark has been "shared participation," including transferring uncompensated care funds to subsidize coverage for low-income adults and children and encouraging enrollment in employer-sponsored and individual health insurance plans, wrote the nonprofit fiscal watchdog group.

"This 'shared participation' approach to reform was instrumental in solidifying support for Chapter 58 from a broad spectrum of stakeholders, including hospitals, physicians, insurers, employers, unions, and community groups, and it has helped keep the support solidly intact despite occasional but significant disagreements over some aspects of implementation," wrote Alan G. Raymond, who was the principal author of the Massachusetts Taxpayers Foundation report.

Since implementing the health reform program in 2006, about 148,000 newly insured residents enrolled in employer-based insurance, while another 169,000 joined Commonwealth Care, which is the unsubsidized state reform program. An additional 76,000 joined MassHealth, which is the subsidized state program, and another 39,000 bought individual health insurance plans.

The health reform uses individual and employer incentives and responsibilities to "build on the state's historically high level of employer sponsored coverage," according to the report.

The report adds that "strong, steady growth in privately funded coverage has helped dispel concerns that public programs would replace, or 'crowd out,' private coverage. In fact, the Foundation estimates that the added cost to Massachusetts employers for newly insured employees and dependents is at least $750 million—more than double the $353 million increase in state spending since health reform was enacted."

Jon Kingsdale, executive director of Commonwealth Health Insurance Connector Authority, which oversees the Massachusetts reform program, says the report shows that shared responsibility is "really the theme of our landmark reform legislation and it works."

"The financial framework is working as envisioned: because everyone is sharing responsibility—individuals, employers, and government—[and] it is reasonably affordable," says Kingsdale.

The Massachusetts Taxpayers Foundation report comes after concerns about whether the healthcare reform program can last. In fact, government and industry officials have charged that the program may not be sustainable over the next 5 to 10 years if Massachusetts does not control health spending. In response, state officials are exploring a bundled physician and hospital payment system that would reward prevention and keeping people out of the hospital. Advocates for bundled payments believe changing the way the system pays doctors and hospitals could help control healthcare costs.

Les Masterson is an editor for HealthLeaders Media.

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