The single-payer healthcare system was once the reform flavor of the moment, but it has been largely pushed to the rear and replaced by talk of a public insurance option and individual mandate.
Massachusetts' healthcare reform, which included an individual mandate that required residents to purchase insurance, has increased coverage, but critics charge that the plan has not decreased costs or improved access to care.
In a study released Wednesday, two organizations say the Massachusetts health system is a failure and national policymakers should not look to that model as a possible solution. Instead, they propose a single-payer "Medicare for all" system as a better alternative.
Physicians for a National Health Program and Public Citizen, which support a single-payer health system, charged the Massachusetts project has not covered as many people as claimed, not contained costs, and hurt safety-net providers like public hospitals and community clinics.
In fact, the individual mandate is merely a "new tax on the uninsured," according to the study.
"We are facing a healthcare crisis in this country because private insurers are driving up costs with unnecessary overhead, bloated executive salaries, and an unquenchable quest for profits--all at the expense of American consumers," says Sidney Wolfe, MD, director of Public Citizen's Health Research Group in Washington, DC, at a press conference announcing the study Wednesday. "Massachusetts' failed attempt at reform is little more than a repeat of experiments that haven't worked in other states. To repeat that model on a national scale would be nothing short of Einstein's definition of insanity."
The reform law, which was enacted in 2006 with unanimous support from the Democratic-controlled Massachusetts Legislature and then Republican Governor Mitt Romney, requires residents to have health insurance and fines businesses that do not provide coverage.
In the study, the two groups said the individual mandate meant more business for health insurers, but didn't address administrative costs associated with private health insurance. In fact, the Massachusetts Connector, which was created to promote the program and help link people to the health plan options, adds 4-5 percentage points to private insurer policies, according to the study.
Though the reform has added to the number of insured residents in the commonwealth, the study's authors said the total is not as high as promoted. The Urban Institute found that 2.6% of Massachusetts respondents said they were uninsured in a mid-2008 phone survey. However, two other sources claim the percentage is about twice that number, according to the study.
Jon Kingsdale, executive director of the Massachusetts Connector, says Wednesday the state is confident with the 2.6% figure because they went "to great lengths" to accurately survey the uninsured.
"This low level of uninsured is consistent with the stated goal of health reform to achieve near-universal coverage and is only a point or so above the uninsurance rates reported by many European countries with so-called universal access," says Kingsdale.
Rising costs
The study's authors say another problem with the initial Massachusetts reform is that it did not address rising healthcare costs. Healthcare costs, in turn, will increase from $1.1 billion in fiscal 2008 to $1.3 billion in fiscal 2009.
On the flip side, if the state had created a public single-payer system, it could save about $8-$10 billion annually through reduced insurer administrative costs, which could go to covering uninsured residents and improving coverage for those with health insurance, according to the study.
The major problem is that policymakers created incremental healthcare reform while maintaining the same private health insurance system, says Rachel Nardin, MD, president of the Massachusetts chapter of Physicians for a National Health Program, assistant professor of neurology at Harvard Medical School, and study co-author.
"It is very hard to have effective cost control in incremental reform because it's piecemeal," says Nardin. "I think that is an extremely important lesson for national reform that comes from Massachusetts."
Kingsdale disagrees with that analysis. He says the $1.3 billion projection is from an outdated financial statement and is not actual costs. In fact, the state now projects costs to come in at about $800 million in the current fiscal year—not the $1.3 billion figure cited.
Barriers to care
To help offset state budget constraints and fund the rising costs of the health reform, Governor Deval Patrick last fall reduced funding to safety-net providers, such as public hospitals and community clinics. This has forced at least six community clinics to close and hospitals to cut the number of inpatient psychiatry beds.
This is an example of why insurance does not equal universal access to care, says Nardin.
"These safety-net services, which often lose money for hospitals even when patients have good insurance, include emergency care, chronic mental healthcare, and primary care. The public hospital where I work is busier than ever, but has just announced that it will close six community clinics, and about half of its inpatient psychiatry beds—despite critical shortages of primary care and psychiatric services," says Nardin.
Many Massachusetts residents are still underinsured. In fact, those who once used the free care system now must pay copays for medication and care, says Nardin.
One reason why the Massachusetts system, and previous state plans, failed is that the reforms maintain the private health insurance system. The reforms are incremental and merely add new public subsidies or expand Medicaid. "It is time to wake up from this insanity and enact single-payer health insurance for all," says Wolfe.
Canadian model
While opposing the Massachusetts model, the study's authors also promoted the United States National Health Care Act, which is a bill in Congress that would implement a single-payer system without private insurers.
The single-payer advocates support a system similar to the one in Canada. By eliminating private insurance overhead while spending the same amount on healthcare, the U.S. would avoid waiting lists and shortages that have been an issue in our neighbor to the north, which spends much less on healthcare, says Steffie Woolhander, MD, co-founder of Physicians for a National Health Program, associate professor of medicine at Harvard Medical School, and study co-author.
In announcing its findings, the two groups also presented an open letter to Sen. Edward Kennedy that was signed by more than 500 Massachusetts physicians and other health professionals to urge him to reject the Massachusetts model and support the single-payer system.
Responding to the study, Ian Duncan, FSA, FIA, FCIA, MAAA, a board member of the Commonwealth Health Insurance Connector Authority Board and founder and president of Solucia Inc., a Hartford-CT based consultant for the healthcare financing industry, tells HealthLeaders Media the scale of the health system problem is so great that he is not surprised that Massachusetts' experiment has faced obstacles.
Duncan adds the reform has created a "remarkable collaborative achievement on the part of the stakeholders."
"Massachusetts has achieved a remarkably low rate of uninsurance while encouraging the best aspect of the market (private bargaining between employers, employees, providers, and government payers) without some of the faults that we see too often in government systems," says Duncan.
Les Masterson is senior editor of Health Plan Insider. He can be reached at lmasterson@healthleadersmedia.com.