Costs, the elephant in the universal health care closet

The Massachusetts health plan is looking at better ways to finance their universal system. With universal coverage expenditures/capita have risen above the already outrageous national average of about $8,000/year.

“They want a new payment method that rewards prevention and the effective control of chronic disease, instead of the current system, which pays according to the quantity of care provided.

It appears it was a mistake not to control costs in the first place:

“Those who led the 2006 effort said it would not have been feasible to enact universal coverage if the legislation had required heavy cost controls. The very stakeholders who were coaxed into the tent – doctors, hospitals, insurers and consumer groups – would probably have been driven into opposition by efforts to reduce their revenues and constrain their medical practices, they said.”

Some good things are happening:

“Frankly, it’s very hard for the average consumer, or frankly the average governor, to understand how some of these companies can have the margins they do and the annual increases in premiums that they do,”

“Insurers seeking to participate in the state’s subsidized insurance program, Commonwealth Care, recently submitted bids so low that officials announced last week that they would keep premiums flat in the coming year.”


“Some health policy experts argue that changes in payment practices will not be enough to slow the growth in spending, even when combined with other cost-cutting strategies. To truly change course, they say, the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care.”

Medicynical note: In a system that has institutionalized excess expenditure at every level change is difficult. We need to look at every level in the supply chain and question costs and demand more efficiency. Cutting some of the fat out of the insurance business is a start. I’ve focused on reforming patents in the past and that’s also a possibility.

Lastly we already ration care by cost. In oncology for example, patient delay is a significant cause of morbidity and mortality. People who can’t afford to pay simply delay or completely forgo treatments.

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