^{Posted on April 30, 2009}

Mass. Model for Health Overhaul 'Not Viable,' Expert Tells Lawmakers

By Alex Wayne, CQ Staff
CQ TODAY ONLINE NEWS — HEALTH
April 23, 2009

A Massachusetts doctor and health policy expert told Congress on Thursday that he believes his state’s 2006 overhaul of its health system — legislation that may be a model for a national overhaul — “will fail.”

The physician, David Himmelstein, told the House Education and Labor panel’s health subcommittee that based on his experience working in the Cambridge Health Alliance, Harvard University’s hospital system, Massachusetts’ health overhaul won’t work in the long term because it is too expensive.

“I think it’s economically not viable and I see from my patients it’s not viable,” Himmelstein said after Rep. Dennis J. Kucinich, D-Ohio, asked him if he thought the overhaul would fail.

“I think it will fail,” said Himmelstein, who is an associate professor of medicine at Harvard and a well known advocate for a single-payer health system, in which the government would provide everyone health care.

His observations might be important as lawmakers in Washington move toward a Massachusetts-style overhaul of the nation’s health system. Many Democrats have expressed admiration for the Massachusetts system, in which a government agency called the Commonwealth Connector helps state residents obtain private health insurance if they can’t get it through their employers or government programs such as Medicare.

The overhaul has greatly boosted insurance coverage in Massachusetts; the state says that less than 3 percent of its residents lack insurance, and the U.S. Census says the state has the lowest rate of uninsurance in the country.

But the overhaul has also been more expensive than expected. Massachusetts legislators have been criticized for doing little, when the overhaul was written, to try to control health care costs.

State legislators predicted when the law was written that the new system would cost the state $400 million in fiscal 2008; it actually cost $628 million. Fiscal 2009 spending was forecasted to be $725 million; the budget for the system is $869 million this year, though the state expects to spend less.

Long-term cost problems in the state are even worse, according to the Urban Institute, which published a study on the Massachusetts overhaul in January. Massachusetts has some of the highest health costs in the nation, in part because its hospital, physician and insurance markets are all highly concentrated and lack serious competition, according to the Urban Institute. For those and other reasons, premiums for insurance offered through the Connector are often unaffordable if residents make too much money to qualify for subsidies, the Urban Institute says.

“The way we’re increasing coverage is by buying additional insurance from [private insurers] on top of already high costs,” Himmelstein said. “We’ve had no means of cost containment.”

Kucinich, a single-payer advocate himself, thinks Congress is too concerned about preserving a role for private insurers within the health care system.

“Our efforts in Congress should be about health care, not insurance care,” Kucinich said. “What we know, and what Dr. Himmelstein was talking about is, the insurance companies make money not providing health care.”

But a single-payer system is not supported by President Obama or many Democratic leaders. That is because previous efforts at health care overhauls, particularly former President Bill Clinton’s effort in 1993-94, failed after people with insurance became worried they would lose their coverage and be forced into a government-run system.

“As we go forward, we need be mindful of those 160 million people getting insurance from their employers and we not pull that string unless and until we’re ready to replace the paradigm,” warned Rep. John Kline, R-Minn.