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Public Hospitals, Community Clinics Suffering Under Massachusetts Health Care Reform

Feb. 18, 2009 

Public Hospitals, Community Clinics Suffering Under Massachusetts Health Care Reform

Statement of Steffie Woolhandler, M.D., Associate Professor of Medicine, Harvard Medical School and Co-Founder, Physicians for a National Health Program

As Dr. Nardin pointed out, many remain uninsured in Massachusetts and access to health care continues to be a problem statewide; for many residents it has actually worsened. This is particularly disgraceful given the surge in spending for the reform effort, which has run hundreds of millions of dollars over its original budget. The reform cost $1.1 billion in fiscal 2008 and $1.3 billion in fiscal 2009.

These high costs have already triggered a new crisis in our state. Last fall, Gov. Deval Patrick announced massive cuts to safety-net providers including public hospitals and community clinics. As a result, these providers have reduced the care available to the state’s remaining uninsured, as well as to others who rely on them for services in short supply in the private sector. These safety-net services, which often lose money for hospitals even when patients have good insurance, include emergency care, chronic mental health care and primary care. The public hospital where I work is busier than ever, but has just announced that it will close six community clinics, and about half of its inpatient psychiatry beds – despite critical shortages of primary care and psychiatric services. Most of our poor patients, who previously received completely free care, are now forced to pay upfront co-payments prior to receiving care.   It is not surprising that a recent survey of Massachusetts residents directly affected by the reform found that they were more likely to have been hurt by the reform than helped. 

Meanwhile, the reform further encouraged the overuse of expensive, high-technology care.   Little-known provisions in the bill increased payments for specialty care while cutting reimbursement for primary care. This has further tilted health spending toward expensive, high-tech care and away from the primary and preventive care that is the sine qua non of quality, efficient health care.

By requiring that uninsured residents purchase private health insurance, the law reinforced the economic and political power of health insurance firms. Patients were forced to help foot the bill for private insurers’ high overhead – three to four times higher than Medicare’s administrative costs.   Moreover, the agency that administers the new law (the “Connector”) adds an extra 4 to 5 percentage points to the already-high overhead of private health insurance policies. And for hospitals and doctors, the new reform has added new administrative burdens and costs.

In contrast, a single-payer system of non-profit national health insurance could save $8 billion – $10 billion annually in the state through reduced administrative costs. This money could be used to cover all of the state’s uninsured residents and to improve coverage for those who now have insurance with large co-payments and deductibles, without any increase in total health care costs.

The Massachusetts reform law is not providing universal access to care, even in a wealthy state with the most favorable circumstances. We started out with high levels of medical spending and low rates of uninsurance. Yet even under these near-ideal conditions the reform is failing. It would be a grave mistake to use Massachusetts’ reform as a model for the nation.