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Mass. Medicaid chief: Single payer may be better than ‘devil-may-be’ market

By Kyle Cheney / State House News Service
Boston Herald, Feb. 20, 2011

A senior Patrick administration health care official said Friday that a single payer system may work more effectively and efficiently than Massachusetts’s existing insurance market, a high-profile endorsement that raised eyebrows at a legislative hearing.

“I like the market, but the more and more I stay in it, the more and more I think that maybe a single payer would be better,” said Terry Dougherty, director of MassHealth – the state-run Medicaid plan that insures nearly 1.3 million Massachusetts residents – when lawmakers asked for his “personal view” on a single payer system.

Dougherty’s comment, made during a budget hearing at the Boston Public Library, prompted his boss, Secretary of Health and Human Services JudyAnn Bigby, to interject: “That’s his personal opinion.”

Dougherty noted that MassHealth, by far the largest program in state government, spends just 1.5 percent of its $10-billion-a-year budget on administrative costs – compared to about 9.5 percent by the private market, according to studies by the state Division of Health Care Finance and Policy. That figure won plaudits from several lawmakers on the panel, including some who have supported implementing a statewide single payer system.

After his remarks, Dougherty told the News Service that he’s learned to appreciate “elements of single payer” during his 30 years in health care.

“It’s got to be better than this devil-may-be marketplace,” he said. “We don’t build big buildings. We don’t have high salaries. We don’t have a lot of marketing, which makes, to some extent, some of the things that we do easier and less costly than some things that happen in the marketplace. Overall, my point is, we have individuals who work in state government in MassHealth ... who are just as smart, just as tactile, just as creative as people who work in the private sector, but they work for a lot less money.”

A single payer system would replace the state’s patchwork of nonprofit and private insurers with a single, public insurer through which all health care dollars would flow to hospitals, doctors and other health care providers. Supporters say it would eliminate administrative waste and ensure that all residents receive adequate coverage.

But while supporters point to single payer models used by other countries and tout the idea as a cost saver, critics warn the system would result in government bureaucrats deciding what services to cover and how to pay for them, would reduce the quality of care and would disrupt relationships between doctors and patients.

Hundreds of thousands of Massachusetts residents have endorsed the approach. In fact voters in 14 House districts –including five that backed Scott Brown for U.S. Senate – voted overwhelmingly last year to support a non-binding ballot question that asked, “Shall the state representative from this district be instructed to support legislation that would establish health care as a human right regardless of age, state of health or employment status, by creating a single payer health insurance system like Medicare that is comprehensive, cost effective, and publicly provided to all residents of Massachusetts?”

A similar question passed in 10 other House districts in 2008.

Although last session 50 members of the Legislature supported a single payer model, the issue has lacked support from the upper echelons of the Legislature and the Patrick administration.

A single payer plan would scrap Massachusetts’s landmark health care system, which relies on the private insurance marketplace, and that backers have credited with helping insure about 98 percent of the population. Backers of the existing structure, while acknowledging that health care costs have continued to climb, note that the state has covered about 430,000 residents since the inception of health care reform in 2006. Individuals are required to purchase health insurance, and low-income residents without access to health care through their employers may obtain partially or fully-subsidized care through the state’s Connector Authority, an exchange that pairs consumers with private plans, or through MassHealth.

This session, only 32 members signed on to the single payer proposal, although the sponsors include several high-ranking lawmakers: Rep. Stephen Kulik, vice chair of the Ways and Means Committee; Rep. Martha Walz, assistant vice chair of the Ways and Means Committee; Reps. Ellen Story and Byron Rushing, members of Speaker Robert DeLeo’s upper leadership team; and eight House committee chairs. The bill’s lead sponsors are Rep. Jason Lewis (D-Winchester) and Sen. James Eldridge (D-Acton). Last session’s lead sponsor, Rep. Matthew Patrick (D-Falmouth) was ousted at the polls by Republican David Vieira.

Benjamin Day, executive director of Mass Care, a single payer advocacy group, noted that only six of the lawmakers in the 14 House districts whose voters endorsed single payer health care signed onto the bill. He asserted that many members of state government’s health care hierarchy support single payer health care but keep it to themselves.

“Everyone is making political considerations, tactical considerations,” he said.

Day said supporters of a single payer system are eyeing Vermont, which recently elected a Democratic governor who ran on a platform that included a single payer system.

"If Vermont passes it, that will be such an incredible boon,” he said.

Day noted that Vermont has hired key players in Massachusetts’ own landmark health reform efforts, including Jonathan Gruber, a member of the Massachusetts Connector Authority board and Anya Rader Wallack, a health care consultant who previously headed the Massachusetts Medicaid Policy Institute.

Proposals to advance a single payer system have fallen in and out of favor for decades. Before he became Senate president in 2003, Robert Travaglini was the lead sponsor of a proposal to create a task force charged with recommending ways to implement single payer health care in Massachusetts, although he later endorsed the current system, which Gov. Mitt Romney signed into law in 2006.

http://news.bostonherald.com/news/politics/view/20110220medicaid_chief_single_payer_may_be_better_than_devil-may-be_market/