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Massachusetts Is No Model for National Health Care Reform

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

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 more than 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 copayments, 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 premium, deductible 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.

“A single-payer system will make health care accessible to all Americans by automatically covering everyone under one national health insurance plan,” said Sidney Wolfe, M.D., director of Public Citizen’s Health Research Group. “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.”

The study found that a national non-profit 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 copayments and deductibles imposed by the law,”

To read an embargoed copy of the report, “Massachusetts’ Plan: A Failed Model for Health Care Reform,” go to http://pnhp.org/mass_report/.

Comments

3 Responses to “Massachusetts Is No Model for National Health Care Reform”
  1. care4all says:

    Health insurance companies play a major role in our current healthcare crisis. These companies make huge profits and their CEOs make millions, while the rest of us face skyrocketing healthcare costs, impossible bureaucracy, and life-diminishing insurance denials.

    HEALTH INSURANCE COMPANY PROFITS IN 2007:
    1. UnitedHealth Group — $ 4.654 BILLION. UnitedHealth Group owns Oxford, PacifiCare, IBA, AmeriChoice, Evercare, Ovations, MAMSI and Ingenix, a healthcare data company
    2. WellPoint — $ 3.345 BILLION. Wellpoint owns BLUES across the US, including Anthem Blue Cross Blue Shield, Blue Cross Blue Shield of Georgia, Blue Cross Blue Shield of Wisconsin, Empire HealthChoice Assurance, Healthy Alliance, and many others
    3. Aetna Inc. — $ 1.831 BILLION
    4. CIGNA Corp — $ 1.115 BILLION
    5. Humana Inc. — $ 834 million
    6. Coventry Health Care — $626 million. Coventry owns Altius, Carelink, Group Health Plan, HealthAmerica, OmniCare, WellPath, others
    7. Health Net — $ 194 million

    The huge insurance company profits—BILLIONS EACH YEAR—could provide quality healthcare for millions of people, and to pay physicians adequately for their work.

    We need to get the insurance companies OUT of healthcare . The only solution is a NON-PROFIT SINGLE-PAYER HEALTHCARE SYSTEM – and the single payer should not be an insurance company or a group of insurance companies.

  2. care4all says:

    Health insurance companies play a major role in our current healthcare crisis. These companies make huge profits and their CEOs make millions, while the rest of us face skyrocketing healthcare costs, impossible bureaucracy, and life-diminishing insurance denials.

    HEALTH INSURANCE COMPANY PROFITS IN 2007:

    1. UnitedHealth Group — $ 4.654 BILLION. UnitedHealth Group owns Oxford, PacifiCare, IBA, AmeriChoice, Evercare, Ovations, MAMSI and Ingenix, a healthcare data company

    2. WellPoint — $ 3.345 BILLION. Wellpoint owns BLUES across the US, including Anthem Blue Cross Blue Shield, Blue Cross Blue Shield of Georgia, Blue Cross Blue Shield of Wisconsin, Empire HealthChoice Assurance, Healthy Alliance, and many others

    3. Aetna Inc. — $ 1.831 BILLION

  3. Sasch says:

    As a small business owner, I completely at whit’s end as to how we can possibly afford health insurance. Our rates for our small company of 25 people just went up 40% (that was the best bid, with 56% being the biggest). We simply cannot absorb that increase and have to pass 1/2 of it on to our employees.

    I normally believe in competition and leaving things in the private sector. However, after really learning how other countries do nationalized health care and knowing first hand the burden we have to take on here in Mass for healthcare insurance, I am now a strong proponent of at least having the government offer a health care option to all.

    How in the world can prices on insurance rise by 40% when there is absolutely no increase in value of what’s being provided? No one sees a doctor 40% more than they used to (if at all for that matter). The answer to that question is in the above posts – the ridiculous profits insurance companies pull in.

    And on a related note – did you know that 24 cents of every dollar on health care goes to health insurance administration? Did you know that in Canada that’s on the order of 3-5 cents? And we thought that privatization and competition would create efficiency. Think again.

    Let’s change the system before employers like us have to lay off people to pay off health insurance costs.