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Massachusetts Is No Model for National Health Care Reform

Feb. 18, 2009  

Massachusetts Is No Model for National Health Care Reform 

Public Interest Groups Urge Sen. Kennedy to Introduce Single-Payer Legislation

WASHINGTON, D.C. – The Massachusetts health care system, widely regarded as an example of how to provide universal coverage and keep costs low, is in fact faltering badly and should not be held up as a national model for reform, according to a study released today by Physicians for a National Health Program (PNHP) and Public Citizen.

The groups urged Sen. Edward Kennedy (D-Mass.) to reject his home state’s approach and, instead, introduce Senate legislation crafted after the House’s United States National Health Care Act, H.R. 676, which would implement single-payer financing of health care while maintaining the private delivery system. The public interest groups also released a letter to Kennedy signed by approximately 500 Massachusetts physicians and health professionals urging the senator to embrace single-payer reform.

“Massachusetts physicians have the unique opportunity to observe the effects of this reform on patients every day,” said Rachel Nardin, M.D., president of the Massachusetts chapter of PNHP and lead author of the study. “The nearly 500 doctors who have signed the open letter to Sen. Kennedy see that the reform is deeply flawed.”

PNHP’s study of the Massachusetts model found that the state’s 2006 reforms, instead of reducing costs, have been more expensive than expected. The budget overruns have forced the state to siphon about $150 million from safety-net providers such as public hospitals and community clinics.

Many low-income residents, who used to receive completely free care, now face co-payments, premiums and deductibles under the new system – financial burdens that prevent many of them from receiving necessary medical treatment. Since the state’s reforms passed, premiums under the state insurance program have increased 9.4 percent. The study found that if a middle-income person on the cheapest available state plan got sick, he or she could end up paying $9,872 in premiums, deductibles and co-insurance for the year.

Many residents remain uninsured or have inadequate insurance.

Under a single-payer system, doctors, hospitals and other health care providers are paid from a single fund administered by the government.

“We are facing a health-care crisis in this country because private insurers are driving up costs with unnecessary overhead, bloated executive salaries and an unquenchable quest for profits — all at the expense of American consumers,” said Sidney Wolfe, M.D., director of Public Citizen’s Health Research Group. “Massachusetts’ failed attempt at reform is little more than a repeat of experiments that haven’t worked in other states. To repeat that model on a national scale would be nothing short of Einstein’s definition of insanity.”

The study found that a national nonprofit single-payer system could save Massachusetts about $8 billion to $10 billion a year in reduced administrative costs. Currently, Americans spend 31 cents of every health care dollar on administrative costs, by far the highest rate in the world and much higher than the 17 cents spent in Canada, which has single-payer universal health care.  

“Big hospitals and insurers have gotten rich off reform, but a survey shows that more people directly affected by it have been harmed that helped,” said Steffie Woolhandler, M.D., a PNHP co-founder and associate professor of medicine at Harvard Medical School who helped prepare the study. “We’re seeing patients who now can’t afford vital medications and treatments that they’ve been on for years because of the new co-payments and deductibles imposed by the law.”

Read the report, “Massachusetts’ Plan: A Failed Model for Health Care Reform.” 

Read the letter to Sen. Kennedy.

Read the labor letter to Pres. Barack Obama.

Read personal stories from Massachusetts patients.