Physician Payments Affect Massachusetts Health Insurance Law

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Proponents of the Massachusetts health insurance law "underestimated costs and overestimated revenue," which has "obliged the state to spend more to subsidize insurance" to keep the "law's promises," Alan Sager and Deborah Socolar, directors of the Health Reform Program at the Boston University School of Public Health, write in a Boston Globe opinion piece. The authors state, "This obligation imposes unsustainable financial and political stresses amid a growing budget deficit," adding, "Many health reform advocates therefore now declare cost control crucial to the law's survival" -- something that "has been unattainable throughout the" U.S.

"Current cost control proposals -- like publicizing hospital prices, adopting electronic medical records or promoting prevention -- will do little to cut costs," which is "why they are politically feasible: they don't upset insurers or hospitals, doctors, other caregivers and drug makers," according to Sager and Socolar.

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Sager and Socolar write, "Given doctors' power and their unique ability to squeeze out waste, the challenge is to put our health care dollars in their hands under conditions that verifiably let us trust them to spend it well." They add, "That entails dramatic but carefully coordinated bottom-up reforms in how care is given and financed." The authors "urge development of small clusters of primary care doctors and other professionals that live within budgets, accepting capitation payments calibrated to patients' health." Sager and Socolar continue, "Raising primary care doctors' incomes by half would sharply increase their supply and their time to listen to patients and coordinate care."

According to the authors, under such a system "[p]ayment-related paperwork will be slashed. Doctors could not gain financially by giving unnecessary care -- or by withholding needed care. Savings will be recycled to expand coverage and benefits and fulfill the promise of the state's health reform law" (Sager/Socolar, Boston Globe, 7/21).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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