In an editorial, Alan Sager and Deborah Socolar, who direct the Health Reform Program at the Boston University School of Public Health, correctly diagnose some of the problems with the Massachusetts health plan:
The law's proponents underestimated costs and overestimated revenue. Redeeming the law's promises has therefore obliged the state to spend more to subsidize insurance. This obligation imposes unsustainable financial and political stresses amid a growing budget deficit. Many health reform advocates therefore now declare cost controls crucial to the law's survival....
Not yet able to lower underlying costs of healthcare, the state will seek new revenue. Methods include recent hikes in premiums and co-payments for families, higher cigarette taxes, proposed new payments by insurers, providers, and employers, and more federal Medicaid dollars. These steps may preserve the law's gains and buy time for fundamental cost containment, but not much time. Rising health costs may crash through the windshield of a stalled economy.
It's pretty fundamental economics that if the value of a product or service to someone is greater than the cost he or she is paying for it, that person will tend to overuse that product or service. And that means the person paying for it (in this case, the taxpayers of Massachusetts) are paying for more health care than is necessary. That would seem to indicate that perhaps focusing on a more consumer-oriented system would be best. But Sager and Socolor don't think so. Giving more control to consumers is dismissed:
...doctors' decisions essentially control almost 90 percent of health care spending. That's why shifting costs to patients can't work.
Why not? Ultimately every health care decision is made by the patient. He or she has the right to refuse any treatment suggested by a doctor. But with our system, which discourages consumer autonomy and reduces the incentive for consumers to play a larger role (if someone else is paying, why should I pay too much attention?), doctors do play a larger role in health care decisions than they should.
Instead of proposing reform that would give consumers more of an incentive to increase their role in their own health care, Sager and Socolor suggest this:
We urge development of small clusters of primary care doctors and other professionals that live within budgets, accepting capitation payments calibrated to patients' health. Raising primary care doctors' incomes by half would sharply increase their supply and their time to listen to patients and coordinate care.
Perhaps that would work, but it sounds like more top-down control of health care to me. I prefer bottom-up solutions, where the people being affected by the care are in charge. If that happens, I think we'd see a much more efficient solution to the problem of rising health care costs, both in Massachusetts and nationwide.