In the novel Atlas Shrugged the main antagonist, Wesley Mouch, conceives the idea for industrial Unification Boards. These boards restrict payments and profits to the number of certain items a company owns. In the case of the Railroad Unification Board it is the miles of track, in working order or not, that a railroad company owns. In the case of the Steel Unification Board, it is the number of smelters, regardless of size or efficiency, that determines what a company would get paid.
Deval Patrick today will be channeling his inner Wesley Mouch when he testifies about his plan to establish his system which radically alters how doctors are paid. Under Deval Patrick’s system a medical practice will receive a payment for each patient they have in their practice. In effect Governor Patrick is creating a Massachusetts Medical Unification Board. The first of five public hearings on the Medical Unification Board plan begins today.
Patrick unveiled a proposal earlier this year to push the industry away from today’s “fee-for-service” model – where insurers pay every time patients get treatment – and toward a “global payment” system. That’s where insurance companies pay doctors and hospitals flat fees for a whole year of patient care, theoretically giving incentives for cost savings.
Patrick plans to testify in favor of his plan before the Legislature’s Joint Committee on Health Care Financing. Others set to appear range from Attorney General Martha Coakley to groups representing Bay State doctors, hospitals and insurers.
The only thing that is going to happen under this system is the deterioration of care. It completely removes competition from the system and replaces it with complacency. It rewards those medical practices and doctors which are not as good as other doctors and practices by giving them the same payments for a patient.
As an example, you need surgery for some reason or another. You look at your options and decide that, for you, surgery at Massachusetts General Hospital is preferable to surgery at your local community hospital. Under Deval Patrick’s Medical Unification Board the difference in the level of care between those two hospitals will in the long run become negligible. For there will be no incentive for Mass General to continue to be a leading hospital, because it would not be able to charge as one.
Deval Patrick’s Medical Unification Board will further erode the quality of Medical Care in the Commonwealth, will quicken the exit of health care providers from the Commonwealth, and in the end will lead to increased prices as all Keynesian schemes ultimately do. It is the wrong policy and should be described as such.