Mass Hospital Association Questions Basis of Obamacare

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Well, that would have been the headline if I were the news editor of the Boston Globe.  

Today’s Globe contains an article concerning objections raised by the Massachusetts Hospital Association concerning problems caused by the Patrick Administration’s proposal to change the reimbursement scheme for health care services from fee-for-service to a flat rate per patient.…

The problem is that a flat rate will provide incentives for health care providers to (i) skimp on care and (ii) try to select only the most health patients.  In short, rationing and shortages.  

RMG readers are an intelligent bunch.  I know what you are thinking: “well, duh.  Of course it will”

Of course, getting the solons in Washington to put 2 and 2 together–not so easy.

The movement away from fee for service to flat per patient fees is the basis for the assumed cost savings in the Senate Finance Committee (a.k.a. the Baucus) bill. If it’s not going to work as claimed, that’s a $400 billion hole in the deficit punched by the health care bill over the next ten years.

Here’s what the Globe had to say:

Public hearings on the first-in-the-nation proposal, which would essentially put providers on a budget rather than pay them for each procedure, begin this week.

Ellen Zane, chief executive of Tufts Medical Center and president of the Massachusetts Hospital Association, said in an interview that the state “does not understand the ramifications of the proposal.

“There are major significant questions that have to be answered,” she added, or “it could kill the industry.” Zane, who met with Patrick to make clear her concerns, is the executive who called the initial plan irresponsible.

Both hospital and physician leaders say they favor changing the way providers are paid, to control costs and improve care. But they feel the changes should unfold gradually, and on a voluntary basis at first, starting with pilot programs that provide incentives for providers to adopt the new payment system.

So the solution may end up causing more harm than good–it could even kill the health care industry.  That’s why you should go slow with implementation.  

And by the same token, shouldn’t the federal government also see whether the cost containment solutions they are proposing on the federal level actually work before building them into assumptions on the cost of national health care?  

Try some pilot programs in different parts of the country.  See if there is some basis for the claimed savings.  That would be the reasonable course rather than rushing into a huge, expensive, deficit-ballooning program that the public opposes… and the Congress itself does not understand…  

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