Morning Rounds: Lessons From Massachusetts?

Keep your eye on Massachusetts.

Three years after instituting a plan that subsidizes health care for many of its residents, Massachusetts now has the lowest uninsured rate in the U.S. — 2.6 percent, compared to the U.S. average of 15 percent. But the nation's leading experiment in near-universal health care is also straining at the seams, with revenues yanked down and costs pushed up by a continuing recession.

So yesterday an influential state commission with representatives from the state legislature, insurers, hospitals and doctors voted unanimously for a radical solution: Within the next five years, upturn the way doctors and hospitals are paid.

Instead of paying providers for each office visit, lab test, or procedure, the state would pay networks of doctors and hospitals a flat monthly or annual fee for each patient they care for.

(But wouldn't providers be tempted to dump the sickest, most expensive patients? Read past the jump to see why the commission thinks not)

 

The size of those annual payments would be negotiated by insurers and providers through a central agency, and would take into account the fact that older, sicker, or poorer patients often cost more, Leslie A. Kirwin, a commissioner from the Massachusetts governor's office told the New York Times.

This is not about containing costs by sacrificing quality. That's been tried and rejected, and rightly so.

The proposal, which still must be endorsed by the legislature and governor before coming law, leaves many details still fuzzy.

It comes two days after a more immediate move to slash health costs in the state: Drop health coverage for about 30,000 legal immigrants. That controversial proposal, which will become law in August unless amended by the governor, would save Massachusetts an estimated $130 million.

Congress is paying close attention to how Massachusetts fixes its budget problems — or doesn't. Yesterday, the Hill's top budget analyst socked it to House and Senate Democrats with a cost analysis of their proposed health plans that the Washington Post called "devastating."

His remarks suggested that rather than averting a looming fiscal crisis, the measures could make the nation's bleak budget outlook even worse.