Arthur Springer • Mar.09.2009 at 09:05:pm

MASSACHUSETTS UPDATE
http://content.healthaffairs.org/cgi/content/full/28/2/604?etoc

Health Affairs, 3.9.09
28, no. 2 (2009): 604-605
doi: 10.1377/hlthaff.28.2.604
© 2009 by Project HOPE

Letters
Grim Prognosis For Massachusetts Reform
Jon Gabel and colleagues (Web Exclusive, 28 October 2008) hope that favorable employer attitudes mean that Massachusetts’ 2006 health reform will succeed where the state’s similar 1988 health reform failed. In truth, the demise of the 1988 law had more to do with economic cycles—the collapse of the Massachusetts Miracle—than with corporate attitudes. Unfortunately, this history, along with the recent downturn in the economy, implies a grim prognosis for the current Massachusetts reform.

The 1988 reform died because health care costs continued to soar, while a recession shrank tax revenues just as tens of thousands lost their jobs and private coverage. (Unemployment rose from 3.2 percent in 1988 to 9.1 percent two years later.) Neither massive expansion of state funding to subsidize coverage for the poor nor a costly mandate—the two main mechanisms to expand coverage under both the 1988 and 2006 laws—was tenable in a cooling economy.

Despite costs of $1.1 billion this year, the 2006 law has covered only half of the uninsured and has left many more with inadequate coverage. A recent Boston Globe/Blue Cross Blue Shield of Massachusetts Foundation survey found that 9 percent of Massachusetts residents avoided or postponed care within the past year because of costs; 14 percent had failed to fill a prescription; and 14 percent had run up medical debts.1 The inadequacy of the new coverage is also evident in Robert Blendon and colleagues’ survey (Web Exclusive, 28 October 2008); those directly affected by the reform were actually more likely to say that reform had hurt than helped them. This seemingly paradoxical result probably reflects the fact that most of the newly insured had previously been eligible for completely free care at safety-net hospitals and clinics paid for by Massachusetts’ free-care pool.

Even the partial gains of the 2006 reform are now in jeopardy, and its collapse may well leave patients worse off than ever. The reform was partly financed by draining funds from the free-care pool, and hence from safety-net providers. Now, with tax revenues plummeting, the governor plans to pull another $100 million from funds owed to the safety-net hospitals in the Boston area (disclosure: we work as primary care doctors at one of them, where these cuts are projected to require hundreds of layoffs and the closure of critical services and community clinics). Further budget cuts likely lie ahead, and the ranks of the uninsured will doubtless swell.

In the end, Massachusetts’ 2006 reform may be remembered as a short-lived expansion of publicly subsidized coverage that served as political cover for the permanent destruction of institutions that have provided care and advocacy for New England’s poor for decades.

Steffie Woolhandler and David U. Himmelstein
Harvard Medical School and Cambridge Hospital, Cambridge, Massachusetts
NOTE
1. K. Lazar, “Medical Costs Still Burden Many Despite Insurance,” Boston Globe, 23 October 2008.