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The fundamental flaws in the Massachusetts (and ACA) model

The Massachusetts Model of Health Reform in Practice

Mass-Care & Massachusetts Physicians for a National Health Program
October 2011

The reform has not addressed the health care crisis that most Massachusetts residents face, and that renders our entire health care system increasingly unaffordable. Health care costs – which are straining employer and household budgets, edging out all other spending priorities by the state and municipalities – have increased at even more rapid rates following reform. Administrative waste in the system has grown as a consequence of introducing new payers into an already bureaucratic health care system. Cost shifting under employer-sponsored insurance, particularly for small business employees, has accelerated. Reform has not achieved universal coverage, despite the mandate, largely because the state has been unable to ensure that truly affordable plans are available. Reform has not reduced the burden of medical bills or medical bankruptcy on Massachusetts' families. The demand for safety net services by the uninsured and underinsured has remained high, and has begun to grow, while reform and subsequent state policy has created a financial crisis for safety net providers serving low-income and minority communities in the state. Reform has not been able to significantly slow the rising use of emergency departments for care.

Most concerning, the modest gains achieved by the reform have come at a high cost – even after the state has successfully shifted many of these costs on to federal taxpayers. The costs of the reform are widely acknowledged to be unsustainable and the state has been forced to restrict benefits and shift costs to residents, employers, and federal taxpayers as a consequence. This may help explain the declining support for reform noted in recent years. Moreover, the costs of the reform have not been born equitably, with low and middle income individuals bearing a disproportionate share of the costs.

The Massachusetts reform has not addressed the fundamental deficiencies in the health care system. The reform contained no proven or robust cost-control measures and thus the state has had to struggle to afford expanded coverage in the face of unsustainable cost increases. The Massachusetts reform introduced new programs and rules to an already complex blend of public and private insurers, leaving the state with increasing administrative complexity – and increasing costs.

There is every reason to believe that the recently passed national reform law based on the Massachusetts reform (The Affordable Care Act) will result in similar mixed outcomes. Our hope is for an equitably financed health care system that serves all Americans in a cost-effective way, without requiring cost-sharing that prohibits needed care. A Massachusetts-style reform will not achieve these goals.

http://masscare.org/wp-content/uploads/2011/10/masshealthreforminpracticefinal.pdf

Comment: 

By Don McCanne, MD

The Massachusetts plan has been successful only in nominally increasing the numbers of individuals insured, but at a trade-off of making almost everything else worse, including the insurance coverage itself. The federal Affordable Care Act (ACA) used the Massachusetts model, and experience with the implementation to date indicates that we can expect the same or similar fundamental deficiencies, making unaffordable under-insurance the new national standard.

In a PNHP press release, Dr. Rachel Nardin, assistant professor of neurology at Harvard Medical School and co-author of this study, stated, "The Massachusetts reform built on a complex blend of public and private insurers, adding to the administrative complexity and cost of the system. To achieve cost-effective, high-quality and truly universal care, we need a single-payer system."

To better understand why the Massachusetts/ACA model can't work, it would be worthwhile to read the full 46 page report, accessible at the link above.