Question 1 Exacts too High a Financial Toll

Perhaps the most controversial initiative on the state ballot this Tuesday is Question 1, which would implement state-mandated nurse-to-patient ratios at hospitals across Massachusetts. Much of the discussion surrounding this ballot initiative has focused on whether such ratios improve quality of care. Notably, even the coalition behind the initiative, the Committee to Ensure Safe Patient Limits, has been unable to cite a study that recommends specific, government-mandated ratios. In California, the only state that has implemented such ratios, there is no evidence that quality of care has improved following implementation.

Particularly in light of the glaring lack of evidence supporting this proposal, it is important for voters to understand the economic consequences of this ballot question. An independent study conducted by Mass Insight Global Partnerships and BW Research Partners concludes that Question 1 would cost between $676 million and $949 million annually. A separate analysis by the Health Policy Commission, an independent state agency, tacks a $900 million annual price tag on the proposal. Question 1 proponents are promoting a study estimating the annual cost of the ballot question at between “only” $35 million and $47 million. However, this study both fails to account for all healthcare facilities that would be affected by the law and disingenuously excludes hundreds of millions of dollars of additional non-wage costs that would be incurred by hospitals as a result of mandatory staffing ratios.

Supporters of Question 1 are touting language in the proposal that prohibits hospitals from decreasing staffing levels to offset the costs of this massive unfunded mandate. However, basic microeconomic principles cannot be defeated at the ballot box. If the cost of providing a service – in this case, healthcare – increases, the provider of the service will be less inclined to supply the service at a given price.

Hospitals will not simply eat their increased costs if Question 1 is approved. Rather, they will close unprofitable units and pass permanent new costs on to consumers in the form of higher insurance premiums, co-payments, and other out-of-pocket expenses. In Massachusetts, out-of-pocket healthcare costs are increasing at a substantially higher rate than inflation and wage growth. Any additional increase in these costs is simply unaffordable for many low- and middle-income Massachusetts residents.

It is important for voters to appreciate that ballot initiatives do not operate in a fiscal vacuum. In addition to the costs that would be incurred by the private healthcare system, the total cost of the proposal includes $100 million per year in additional state government spending. Because the state government must balance its budget, $100 million in new state spending requires $100 million worth of tax and fee hikes, spending cuts, or a combination of both. To put this amount in context, $100 million is approximately equal to combined annual state spending on the Department of Environmental Protection, the Department of Public Utilities, and Elder Protective Services. If voters approve Question 1, everyday residents will inexorably be faced with increased taxes and decreased services.

Both Governor Charlie Baker and his challenger, Jay Gonzalez, are promising significant investments in transportation and education. At a time when these investments are desperately needed, it is counterproductive to pass a ballot initiative that ties up $100 million of state spending in new healthcare bureaucracy. Healthcare spending already constitutes 54% of the state budget, crowding out spending for other priorities such as the MBTA system, local aid to cities and towns, and primary, secondary, and higher education. If Question 1 passes, the percentage of the state budget eaten up by healthcare spending will only increase, likely to the detriment of these necessary investments.

Ultimately, the fiscal effects of Question 1 would inevitably be felt close to home at the local level. Earlier this year, Reading residents voted in favor a $4.15 million Proposition 2 ½ override, which will raise residential property taxes by an average of $488. In light of this recent override (which I supported), any appetite for another property tax increase is virtually nonexistent now. However, if state funding for local aid or public education is cut in order to pay for Question 1, the town could attempt to squeeze more tax revenue out of residents via another override.

Those who support Question 1 undoubtedly have good intentions. However, the success of a policy is measured not by the virtue of the intentions behind it but by its actual consequences. In this instance, the evidence shows that Question 1 will bring myriad unintended economic and fiscal consequences while failing to deliver the benefits touted by its supporters. Thus, on November 6, I will be voting “No” on Question 1 and I urge all voters to do the same.

Sincerely,

Gabrielle Weatherbee

Reading