As the health care reform discussion advances on many fronts in Rhode Island, there is increasing focus on the program in place to the north. As the Massachusetts plan passes its first birthday, it is increasingly seen as a bold and broad effort toward the goals all states seek in their health care systems, universal coverage at an affordable cost. Together with high quality, these are the three legs of the health care stool, and it is recognized that reform must balance these critical elements to avoid unacceptable disruption of the parts of the system that do work acceptably.
But you have to start somewhere, and Massachusetts made the universal coverage leg of the stool the initial focus of its reform. The state intends to accomplish this with an elegant if somewhat broad stroke – mandatory insurance.
Everyone in the state will be required to buy health coverage or face tax penalties. Employers who do not provide acceptable coverage will be fined, and subsidies for low-income families will be made available. The “Commonwealth Connector” is an insurance plan exchange intended to aggregate payment from all sources and to regulate benefits and premiums. To date the plan, as yet still not fully implemented, has been well received. So what are we waiting for?
Well for one thing, there are a few dark clouds on the northern horizon, the most significant being that the cost of basic coverage is somewhat higher than hoped. This is triggering an overrun of nearly $160 million. Keep in mind that the state had planned a cost of approximately $450 million to achieve near universal coverage.
Still, there is optimism because the Commonwealth’s robust economy should be able to handle the costs, and the long-term benefits of having nearly everyone covered when subsequent cost control measures are considered is a powerful tool.
Herein lays the unfortunate contrast with the fiscal situation in Rhode Island.
The individual mandate is a technique that requires some investment up front. Our state, facing a daunting structural deficit already, simply lacks the ante to get into the game this way. We need a plan that either addresses the cost leg of the stool first, or at least at the same time as access is expanded – a pay as you go solution, so to speak.
For example, the Massachusetts plan relies on traditional commercial insurance to pay for care. But Massachusetts has a broad array of carriers participating in their market as compared to Rhode Island, with only one dominant and one secondary insurance player.
Another structural problem Massachusetts faces is that in spite of the plethora of health plans, health care in the state is very expensive. Rhode Island, has a lower-cost provider infrastructure, which will make near-term improvement more difficult. But we are an importer of care among Rhode Islanders who routinely seek care in greater Boston, robbing the state of some level of productivity induced by greater volume of service.
One strategy Rhode Island could consider might be to improve our interstate competitive stance by building a truly world-class academic medical center here, such as that proposed by Brown University and Lifespan through its merger with Care New England. We could then dismantle our intrastate competitive hospital market in favor of a more collaborative and efficient “centers of excellence” model.
Eventually, unless health care reform takes on a national focus, states will have to focus on the reimbursement system for providers to control costs. The dilemma is that this is nearly impossible with the fragmented financing our employer-based, insurance-funded system provides. Massachusetts has made important progress. But Rhode Island will need an even bolder and more nimble approach in light of our fiscal capacity. •
Ted Almon is president and CEO of The Claflin Co., a medical equipment supplier, and is an active participant in the debate over health care in Rhode Island.
