Stanton on Health Care Cost Control Bill

In one of their last minute “Hail Mary” passes before the end of the legislative session, Beacon Hill passed a 300+ page bill designed to contain health care costs.  With little debate and little more than 14 hours to read such a novel of a bill, continues and adds to Massachusetts’ top-down approach of policy makers and political insiders controlling the health care market.

As the bills length implies, it does nothing but add more bureaucracy to the health care system, indeed it adds a whole new state-run regulatory office.  Housing and Economic Development Secretary Greg Bialecki has stated that the new Massachusetts health care system may include more jobs outside of hospitals than the current system, those jobs he was talking about may just be for this new agency.

Additionally, this alleged cost control bill does nothing to contain costs.  In fact, you can expect costs to rise and quality of care to fall.  As the Wall Street Journal points out, under this new law, “all Massachusetts doctors, hospitals and other providers must register with a new state bureaucracy as a condition of licensure—that is, permission to practice.” A special Health Policy Commission board consisting of an eleven-member board “will use the data to set and enforce rules to ensure that total Massachusetts health spending, public and private, grows no more than projected gross state product through 2017.” In order to do so, the new board forbids these registered providers (i.e. hospitals and doctors) from making “any material change to its operations or governance structure” without the commission's approval.

What this means is that the entire healthcare system in Massachusetts will be under the thumb of Beacon Hill as it imposes a one-size-fits-all policy on every hospital in the state.  This bill kills any attempt at innovation and efficiency as anything that is outside the confines of the dictated measures of Beacon Hill will be heavily fined and risk losing licensure.

This further consolidation in the market will only exacerbate one of the main causes of the healthcare cost predicament we find ourselves in today. By denying consumers choice and a variety to that choice, the law serves only to make healthcare matters worse as it reduces the operating flexibility both in the form of care and in regards to finances, as credit rating agencies like Moody’s hint at downgrading the credit rating of Massachusetts hospitals because of this bill.

The Pioneer Institute draws a perfect distinction between the reforms offered in this bill and the real reforms needed to reduce healthcare costs; “Rather than provide financial incentives for individual patients to take charge of their own medical care, this legislation rearranges the system based on accountable care organizations (ACOs) and governmentally-imposed changes in payment methods.”

Massachusetts already spends more per capita on health care than any other state, quite possibly more than any other industrialized nation in the world.  When adjusted for higher wages and academic medical centers, the healthcare costs in Massachusetts are15% higher than the national average.  With this new bill we can only expect that percentage to increase.

There is a reason we call doctors “Doctors” and politicians “Politicians” and we would do well not to blur this distinction.  It is foolish to try to conform healthcare to the designs of government rather than to allow the healthcare industry to conform itself to the designs of healthcare.  The debilitating and lumbering bureaucracy should not be in charge of a system that requires nimbleness and ingenuity like health care.

Yet, sadly, it seems that Beacon Hill is set in its ways and has formed some pretty bad habits.  It is a bad habit, perhaps even a trademark of insanity, to think that if government has intruded its hand into a particular commodity and that commodity begins or continues to sink that the solution calls for a heavier hand.

It is time we tried withdrawing government’s hand in the realm of healthcare and get the industry out from under the thumb of Beacon Hill.  Real reform is needed; not simply old tricks amplified to look like new ideas.  In order to get it we need new people with new ideas who aren’t afraid to stand up to the status quo.