Today’s edition of the New England Journal of Medicine has an interesting editorial on cost containment mechanisms in the Massachusetts health system. It gives some interesting facts about the context of rising costs and the mechanisms put in place recently to try and contain them, and paints rather an alarming picture of the situation in America generally, but particularly amusing is its introductory discussion of the Massachusetts health financing system:

Governor Mitt Romney and the legislature enacted a landmark law that expanded Medicaid eligibility for low-income residents, provided subsidies to make insurance more affordable for those with moderate incomes, and created a health insurance exchange to help individuals with moderate or higher incomes and small businesses to purchase private insurance. The law included financial penalties for individuals who can afford coverage but do not obtain it and for medium and large employers that do not offer insurance. As the proportion of nonelderly Americans without health insurance rose nationally from 17.1% in 2006 to 18.4% in 2010, Massachusetts countered this trend, as its proportion of uninsured residents decreased from 10.9% to 6.3%.

It doesn’t beat about the bush here, making clear that this package, Romneycare, has a lot of hallmarks of socialized medicine, and having directly slated the whole package home to Romney, it adds in the last sentence:

In 2010, central elements of this Massachusetts law were incorporated in the federal Affordable Care Act.

Certainly, the key changes described at the start of that paragraph sound like Obamacare, and so it’s no surprise when they point out the obvious. Having just enrolled the Medicare-exterminator Dalek as his running mate, I doubt that Romney is particularly interested in having the Obamacare=Romneycare meme get validation from major medical journals.

I think a lot of criticism of Romneycare and Obamacare from the right says that it will lead to increased costs, but the editorial lays out some additional information which contradicts that common criticism. It points out that

From 1998 through 2009, Massachusetts had the highest personal health care spending per capita of any state.Since 2001, personal health care spending as a percentage of the economy has also risen more rapidly in Massachusetts and other New England states than in the United States overall

But Romneycare was introduced in 2006, just past the middle of the growth period, which the attached graph (not included here) shows is pretty linear over the period. I wonder if this higher baseline costs, and the more rapid increase over time in Massachusetts compared to the USA overall, might explain the lower proportion of uninsured nonelderly (11% vs. 17% when Romneycare was introduced)? It certainly appears from the chart of spending growth that without any noticable increase in spending growth compared to before Romneycare, Massachusetts has managed to make big inroads into its uninsured population. So maybe Romneycare has been a big success in reducing inequality in the state?

Lots has been written about Massachusetts’ cost containment problems, but the NEJM article doesn’t slate them home to Romneycare; however, it doesn’t suggest Romneycare made cost containment easier either. Instead, the state legislature has introduced a raft of additional laws to be implemented now, which will attempt to contain costs and which the legislature claims will save $200 billion over 15 years. Most of these changes seem to be a shift towards more rather than less state intervention, but a lot of that intervention appears to be towards supporting ailing providers and reducing the market power of big insurers – so it could be that the intervention is intended to strengthen the free market levers currently operating in Massachusetts, rather than interfere with them directly. The article finishes by saying

Massachusetts will be a testing ground to determine the political viability and economic impact of transitioning from the long-standing dominance of fee-for-service care to a statewide focus on new payment models, with expanded public reporting of costs and quality and more explicit limits on the growth of health care spending.

This makes me think it’s a bitter shame that Romney has been captured by the lunatic wing of his own party, because it appears that Massachusetts is where a lot of the creative thinking on US healthcare reform is being done, but none of it will translate into federal policy if Romney is in the White House and being held hostage by the unmarked helicopter gang he is appealing to now. Having engineered the predecessor of Obamacare, his state – and presumably a lot of people he is familiar with and able to work with – will now be tinkering with mechanisms to contain costs in a free market system. That would surely make Romney the ideal person to implement them, but I guess the USA will just have to wait for a Democrat to implement Massachusetts’ republican health market reforms. What, if anything, does this tell us about the increasing marginalization of “moderate” republicans in the US  (federal) public policy environment, and where is the Republican party going to end up if that continues …?

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