Mass. healthcare system a model for Washington?

Wed Jul 8, 2009 5:11pm EDT

BOSTON (Reuters) - Within Washington's tangled debate over how to reform healthcare, many are looking to Massachusetts, a state that could offer both a way forward and a warning.

As President Barack Obama and Congress work to revamp a wasteful national system which leaves millions uninsured, attention has turned to Massachusetts' ambitious three-year-old program to cover almost all of its 6.4 million people.

Rick Lord, a member of the Massachusetts system's oversight board, last month met with U.S. Health and Human Services Secretary Kathleen Sebelius at Harvard University, and he's also been asked to speak at U.S. Senate hearings.

The program, which is facing a sharp rise in costs as it struggles to provide universal access at a time of economic decline, has a bipartisan heritage.

It was the legacy of former Massachusetts Governor Mitt Romney, runner-up for the Republican presidential nomination in 2008 and a likely presidential candidate in 2012.

But it was also championed by the liberal Massachusetts Democratic Senator Edward Kennedy, a national leader on health issues, who, with other congressional Democrats, is advocating reform plans inspired by the Massachusetts model.

Several plans for reforming the national system include the requirement, in place in Massachusetts, that individuals buy health insurance, just as they must buy auto insurance.

President Barack Obama opposed the idea during his campaign against Hillary Clinton to be the Democratic presidential nominee last year, but has since signaled he'll sign such a measure if it is passed by Congress.

"If you went back five years, you would never be discussing an individual mandate, but it has become a standard part of the national discussion" because of Massachusetts, said Stuart Altman, a Brandeis University healthcare professor who advised Obama during the campaign.

"I think it's fair to say that many components of the Massachusetts plan will be in any plan that could pass" in Washington, Altman said.

FREE COVERAGE FOR STATE'S POOREST

The Massachusetts system also requires employers to offer coverage to their workers, to pay a portion of the insurance premium and provide a range of plan choices.

For those who can't afford it, the state provides subsidized or free plans based on a person's income.

The state system features a body known as "The Connector" which regulates the plans that individuals can buy through their employers.

The number of uninsured state residents has fallen to just 167,000 of the state's 6.5 million people, down from between 400,000 to 650,000 uninsured before the new regulations.

The Urban Institute, a Washington think tank, found in a recent review that from 2006 to 2008, access to care rose so that 91 percent of adults in the state had a usual care provider, up from 86 percent in 2006.
But the group also found evidence it was getting harder to see some specialists or get follow-up care.

Costs also have risen sharply. From an original budget of $472 million at the start of fiscal 2008, Governor Deval Patrick now aims to spend $803 million in fiscal 2010.

The slowing economy is sending more people who lack work into the pool, raising overall costs. As of June 1 there were 177,000 people covered by the program's biggest component, "Commonwealth Care," up from 163,000 in December.

Some liberal critics say the enterprise could be more efficient if it were set up as a "single-payer" system, much as in Canada or Australia, in which a single agency finances health costs as a way to reduce charges from insurers and other for-profit organizations.

Lord and some on the right, meanwhile, say the system hasn't done enough to contain expenses, such as empowering a review board to oversee hospital charges.

OBAMA HEALTHCARE PROPOSALS

Obama has pledged to pass a major healthcare reform this year that would include features strikingly similar to those in Massachusetts such as a version of The Connector.

He has signaled he won't oppose rules that require employers to pay for at least part of the costs of employees' coverage. Obama opposed the idea during his election campaign.

The Massachusetts system lacks a few pieces that Obama and others in Washington support such as a "public option" in which individuals could buy plans directly from the government.

Altman and others say it was easier to set up a plan in Massachusetts compared to a national system, as the state already had money set aside by hospitals to pay for care.

In addition, the terms Massachusetts imposes on employers, such as requiring them to pay $295 per uninsured employee, are weaker than some in Washington would like.

The Urban Institute's Sharon Long said the Massachusetts model was the most widely-cited example to date in the debate over a national system. "Clearly people are looking at it as a successful model," she said of Massachusetts, though she cautioned the state must still show it can control costs.

She noted it was also an example of all the interested parties -- industry, insurers, hospitals, patient groups and politicians -- managing to negotiate a lasting deal.

That's an important lesson for Washington, she said. "People must feel like they're getting enough gains in the system from the process, and that they're not hurt badly enough that they'll step away," she said.

(Editing by Jason Szep and David Storey)

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