Massachusetts Health Care Spends $820 Million to Save $250 Million

Surely, even the New York Times can figure out that spending $820 million on the Bay State's Commonwealth Care "universal" health-care plan, in order to save $250 million in uncompensated hospital care, is not a good trade-off.

Not according to today's article on the latest state to compel its residents to buy health insurance, which reports those savings as the only positive outcome of this out-of-control program. Three years ago, Gov. Romney collaborated with the Democratic-majority legislature to achieve "universal" health care by government diktat: squeezing every resident into either compulsory private health insurance or expanded government programs, using both tax-hikes and subsidies. The taxpayer-crushing results have been discussed frequently in this community.

Today, we learn that, alongside the absurd cost/benefit ratio, the state can no longer bear the costs, which are spiralling out of control faster than other states' costs are. This reminds us of a fundamental lesson of government power: When the government orders you to buy something, the government will have to step in to decide what that something looks like.

Governor Patrick and his allies believe that they are capable of improving how health-care goods and services are priced. For example, they think payers should pay for "episodes of care", instead of bulk quantities of items or procedures. Good idea: We've heard that often from politicians with a far superior grasp of health-care realities than Gov. Patrick, e.g. former U.S. Secretary of Health & Human Services Michael Leavitt.

Sounds good to me: After all, when I fly on a plane, I pay for an "episode of travel". I don't pay a fee to the pilot, and another to the co-pilot, and another to the cabin-crew, and another for fuel, and another for "renting" my seat, and......

So, why doesn't the health-spending environment do the same?* Because the government's interference has prevented it! Blue Cross & Blue Shield of Massachusetts claims that it can move ahead on negotiating prices with providers that are based on value, not just quantities.

Maybe it could, if the state freed it to be a competitive insurer. Unfortunately, I fear that BCBS MA is so hopelessly tied up in government policy that we must consider it a public utility, rather than a risk-bearing enterprise, and have little confidence that it can work the Bay State out of the health-care mess that it's in.

(*I've decided to stop using the term "health-care system" except in extraordinary circumstances: There is nothing systemic about it!)