Last week the Massachusetts’ Special Commission on the Health Care Payment System issued a report that should inform discussion of health care reform.  In 2006 Massachusetts became the first and only state to attempt to provide universal health coverage for its citizens.  Since that time, the state has been struggling to pay for it.  Last year, in fact, reports the New York Times, the state took a number of actions to balance the program’s budget, including approving an assessment on insurers and hospitals, raising penalties for businesses that do not cover workers, increasing premiums and co-payments and raising the state’s tobacco tax; and this year the program faces another $250 million deficit.

So what is the Special Commission recommending?  Replacement of the current fee-for-service system with a global payment system.  Under the current system, a doctor receives a payment for each service that he or she provides, which incentivizes providing more treatment than is necessary.  Under the proposed new system, networks of health care providers would receive a flat fee for each person in the network, regardless of whether that person only received an annual check-up or spent months in the hospital recovering from a serious illness.  The notion is that the latter approach will encourage preventative care and discourage overtreatment.

There would be many challenges with making such a conversion.  How do you ensure that all networks have comparable participants or that those networks with higher risk participants receive extra compensation?  How do you ensure that networks don’t cut corners, especially with dying patients, in order to maximize profit?  How do you determine what the initial per-participant compensation rate should be and the rate at which it should increase over time?  What impact might such a system have on innovation in a state with some of the best academic medical centers in the country?

Even so, I think the Special Commission is on to something.  The proposal may not be perfect, but it should receive serious consideration.

In an earlier post on the subject of health care reform, I complained that I do not understand the national debate going on in Washington, DC like I should.  Two local organizations – West Virginians for Affordable Health Care and the West Virginia Center on Budget and Policy – have taken care of that in a new publication called The Health Express. The Health Express provides the information I need to know in simple easy-to-understand terms.

Why do we need reform?  Forty-six million Americans and 250,000 West Virginians don’t have medical insurance.

What are the major issues?  (1) Health insurance for every American; (2) Meaningful insurance reform; (3) Establish a health exchange that includes a public plan; (4) Reform of the health care delivery system; (5) Financing coverage for all Americans.

What are the options for providing health care for every American?  (1) Expand Medicaid to cover all low-income adults.  (2) Require all large employers to provide health coverage to their employees or pay a fee.  (3) Require all Americans to have health coverage.

etc., etc., etc.

And it ends with a bibliography where I can go to learn more!  Excellent work!

A very important debate is occurring at the national level over health care reform.  I must admit that I do not know as much as I should about the issues.  I, however, do have a few observations based on personal experience:

• Employer-Subsidized Health Coverage.  Am I the only person who thinks this is a crazy way to fund health care?  I believe this development dates back to World War II when wage controls prevented employers from increasing wages, so large companies began providing the benefit in lieu of wage increases.  If my understanding is correct, employer-subsidized health coverage is an accident of history, not a carefully thought-out policy decision.
• Free Agents.  The United States has significant numbers of independent contractors and small businesses for whom health coverage is difficult – or impossible – to fund.  Everyone from Daniel Pink (author of “Free Agent Nation”) to Tom Friedman (author of “The World is Flat”) is predicting that there will be more and more free agents in coming years.  It is not good public policy to have a system that doesn’t work for 45 million people.
• COBRA.  I would like to thank the people who championed the original COBRA legislation that makes health care coverage affordable (debatable, I know) for those who recently left employment.  Having said that, I am sitting here staring at my COBRA forms now, and I can’t even figure out how much I’m supposed to pay – and I’m a lawyer.
• Medicare.  I would like to heckle the people who came up with the idea that old people should have to choose from among various health care and prescription drug plans.  Many people my age have had to make these decisions for their bewildered parents.  It’s all well and good to preach the benefits of “choice,” but any system that confuses and worries the elderly is a bad system.
• Medicaid.  I appreciate the Medicaid safety net, but it’s unfortunate that people basically have to bankrupt themselves to benefit from it.
• Government-Sponsored Health Plan.  As I understand it, President Obama wants one of your options to be a government-sponsored health plan.  I don’t understand why so many people are up in arms over this proposal.  If the private sector can do it more competitively and efficiently, people will choose their plans.   As for me, I’ll probably bet on the government if I’m given a choice.
• Cost and Rationing.  I think government should ensure that somehow – someway everyone has the opportunity to acquire the basics of food, clothing, shelter, a certain level of education and a certain level of medical care.  Having said that, I think it’s reasonable for government to draw lines somewhere.  In the education arena, the line typically is drawn at post-secondary education.  I have no objection to the government saying that it will ensure that I receive a treatment that might lead me to live cancer-free, but not a very expensive treatment that, at best, will give me six more months to live.

The health care debate is complicated,  and I don’t pretend to know any answers, much less all of them.  But I am thankful that intelligent people are out there looking for reasonable solutions.  I don’t expect our leaders to come up the perfect system, but I do expect them to try.