OK, I blew it a couple of days ago. I credulously quoted a brief WBUR report that said in passing that the MA budget was 50% health care. Well, it's not that much. I called in help from Nancy Wagman at the Mass. Budget and Policy Center, and she broke it down into a spreadsheet for us.
Anyway, the correct answer is something like 35% if you include federal matching funds for Medicaid/MassHealth/new health reform law. If you only include “state source” funds, it's about 23%. (BTW, in its big budget discussion, MassINC puts the number at 30%. I don't know how they arrived at that …) Still a vast, vast sum; and considering health care inflation, it really is the biggest deal in the state budget.
That's why Pres. Murray's health care cost control plan is such a big deal. Does it go far enough? It seems to have irritated some of the right people. It may require a bigger cultural change both from physicians and patients to really tame the beast; and we have to remember that one person's unnecessary overspending is another person's golden-goose revenue stream.
for doing the legwork. I disagreed with your initial figure based solely on instinct and what you had published, and instead of digging in heels or ignoring me, you did the research.
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p>So, hats off to you for keeping this blog more than just parroting of MSM and squabbling among we faithful.
Went to my optomotrist today. So I said, “how’s business?”
He replied, “I’ve increased my patient load thirty per cent since the state instituted the new mandatory health care insurance.” I was stupefied. The new health care insurance covers optometry and glasses? I , among other things, am a retired state employee and I don’t have eye care. What’s this all about? No wonder the price of this “mandatory insurance” is skyrocketing.
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p>Getting back the Charley and the consumer and provider must do some belt tightening. Charley, please, you know just as well as I do that if folks pay out of pocket for this health insurance or they get some supplemental help from the commonwealth the bottom line is that it leads to entitlement. You are going to have a run on healthcare providers. You are not going to put the brakes on that. I feel sick so I am going to the doktuh. Or,I need a note from the doktuh cuz I banged in two days last week because I wanted to__________(fill in the blank). I work in the field—-I see it. Lat year I had a fairly serious medical issue. I called a particular internist. Two to three week wait for an initial consultation. Are you shitt’n me—I could be dead by then. I did some research called Mass General and did some arm twisting as I work in the field and asked for professional courtesy. Went in and saw one of the best guys in the country and went under the knife the next day—-only because I work in the field and essentially begged. It’s a good thing I did because I’d be pushing up daisys as we speak. Point being—there is not
sufficient medical providers, competent ones. Massachusetts has the luxury of more MD’s per square inch that perhaps any place in the world. Try the western states or Alaska. You have serious medical issues out there and you are in deep kimshee. Was talking to an MD friend about the practice and he said he just wrote out his quarterky malpractice insurance check to his insurance company for twenty thousand dollars. Thank you John Edwards and Jim Sokolove. You wonder why the system is broken and is exhorbitantly expensive—-one of the primary reasons is tort lawyers. England and Europe doesn’t have that problem. You can’t sue—you can in reality, but the process is so onerous that you in practicality can’t.
The items most typically metioned in discussion of “wasteful” spending such as police details amount to little more than a drop in the bucket. This is a real problem and challenge because health care spending is (1)vital and (2) rising at a rate that may not be sustainable.
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p>In November Massachusetts voters will be asked if they wish to pay no income taxes. If you think about it such a ballot initative requires remarkable maturity and responsibility on the part of voters. But if they do vote to eliminate the largest single source of state revnue what they will really be doing (and this will not be mentioned in the ballot intiative) is to gut health care, and the fact is that more than a million Massachuettts residents could be affected.
Am I the only one old enough to remember Jimmy Carter’s caps on gasoline prices and oil exploration disincentives? Anybody at BMG remember gas lines? Two, three hour waits at the filling station? Anybody? Anyone? Bueller?
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p>Price caps create shortages. Isn’t this what President Murray is talking about?
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p>The Connector set prices LOW enough to spike demand for health services (called “utilization” in insurance parlance) but without the revenue to cover the cost of the services.
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p>So now that economic genius Theresa Murray wants to impose price controls? Does she really think funding $25 million to advance electronic record keeping will do anything?
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p>Hasn’t anyone here taken a microeconomics course? When prices are artificially set by government fiat below market clearing equilibrium, demand will always exceed supply. Prices should be raised to meet equilibrium. Government price controls (a price ceiling) prevents this from happening. The result is a shortage.
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p>This is EXACT what happened with TennCare in Tennessee. It was such a total budget buster, a Democratic governor pulled the plug on it.
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p>We’re heading for exactly the same spot.
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p>Can’t wait.
“Price caps create shortages. Isn’t this what President Murray is talking about?”
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p>No.
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p>I’m glad you’ve taken a microeconomics course, Shep. Now say something coherent about the issue before us.
She certainly sounds like she wants to regulate costs, or implement barriers to the free setting of prices.
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p>Raise prices, or create shortages.
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p>If I’ve read the Globe article incorrectly, please set me right.
Here.
http://www.openmass.org/bills/…
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p>Or just the summaries.
http://vps28478.inmotionhosting.com/~bluema24/s…
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p>Show me where the scary socialist “price controls” are.
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p>You substitute a lot of pseudo-intellectual hogwash for actually doing your homework and talking about what’s actually in Murray’s bill. Thanks for dragging the red herrings around and stinking up the joint.
Actually, her public comments do imply cost controls, but not in a way that typically has any effect, so I kinda think both you and BostonShepard are right. She has said that:
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p>
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p>So, she’s not saying we’re going to limit increases to 7%, but she is saying that we should subject +7% increase to public hearing.
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p>The problem with ‘rate regulation’ is that it’s never worked to reduce costs in a regulated setting: not, at least, in the utility rate regulation area. The regulated industry game the system. They are incentivized to maximize costs, then increase the costs with a cost-plus mark-up to increase the rate. Public hearing merely discloses the underlying costs they pay, usually to 3rd parties. It does the exact opposite from what you intend, because the high cost providers are rewarded for their higher costs.
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p>There’s an economic high flautin’ name for the effect, but I can’t think of it right now.
And to answer your question: Yes—I was on ground zero for the double whammy. The Carter/Dukakis economic catastrophe.
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p>Mike Dukakis’s answer to every problem was to increase taxes—-until he crippled the state and collapsed the economy.
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p>But Mike was a hero because he took the T and drove around in a shitbox and lived in a dump. I know—I spent many a night at Perry St!
This is the first step to the Connector’s meltdown. I predicted it last night in my post.
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p>Prices are set too low which causes demand to increase. This is what happens. We’ve created a $869 million deficit (sorry, in ProgressiveSpeak, the program is “underfunded.”)
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p>Now Senate Prez Theresa Murray is talking about cost controls.
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p>If I could figure out how to post a dwg I could illustrate exactly how the combination of artificially set Connector fees and co-pays will create a budget-busting deficit while at the same time create shortages of health care services.
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p>Price ceilings only make this worse.
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p>Charley, you blast me for not saying something relevant. This is relevant unless liberals believe state-provided health insurance is a worthy pursuit at any level of spending, at any cost, deficits and marginal tax rates be damned.
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p>Oh wait, you do believe that. Never mind.
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p>Prediction: Theresa Murray’s price controls, service provider shortages, and losses into the billions (just like TennCare in Tennessee.)
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p>Next stop, Dukakisville!
This is the first step to the Connector’s meltdown. And I predicted it last night in my post.
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p>Next stop, price controls!
But, it’s going to be a slow, painful process.
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p>First, the rates go up. Next, the advocates pile on that the poor aren’t getting insurance that’s good enough, and if successful, the legislators pile on lower co-pays, eyeglass coverage, more benefits….
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p>Then, the rates go up again, because when you get a good and free benefit, people use it. Go figure.
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p>Eventually, either 2 things happen: 1) a recession, and the legislators are compelled to lower the benefit or, 2) as you say, price controls.
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p>You can see the process happen with MassHealth Dental. Legislators larded it up in 2006 to enhance the coverage for the poor, but didn’t increase the reimbursement rate. Surprise, hardly any dentist will take MassHealth patients.
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p>But the Legislator felt good giving the enhanced coverage, so in the end I guess it’s all good.
did anyone read the article in today’s Boston Globe about the state health plans being underfunded? I read it, and it’s outrageous…and hypocritical. Imagine
requiring people to have health insurance and then not even funding it adequately!
http://www.boston.com/news/loc…
The Administration’s own budget summary says “.. areas like health care which already consumes almost half of the state budget…”
(http://www.mass.gov/bb/h1/fy2009h1/exec2_09/hbuddev.htm, second sentence, third paragraph)
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p>Their press release clarifies what “almost half” means to the Administration by specifying that: “Health care costs consume 45 percent of the budget and are growing at unsustainable rates.”
(http://www.mass.gov/?pageID=pressreleases&agId=Agov3&prModName=gov3pressrelease&prFile=080123_fiscal_budget_2009.xml)
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p>So, where’s the missing money?
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p>Both MassInc and Nancy fail to count any “human services” spending in their calculations. Though much of this is on non-health “welfare” payments, large chunks are spent on “Mental health and retardation” (1.5 billion) and “Public Health” (.5 billion).
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p>Also missing from Nancy’s calculations here is nearly $5 billion given in local aid. “Local aid” is fungible but I think it’s fair to say that a good chunk of this money is used for the relatively high (compared to GIC) health care costs for teachers and other municipal employees.
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p>Both calculations also rely on what most experts agree is a big underestimate for spending on both state-subsidized CommonwealthCare insurance and “free care.” In FY06, the underestimate was nearly half a billion dollars – we’ll see how they do this time around but a supplemental budget is almost inevitable.
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p>Finally, the calculations do not include subsidized or free health care provided to prisoners and students (from kindergarten through university).
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p>I haven’t actually done the math here but I’m guessing I could find close the $6 billion more needed to justify the “almost half” estimates.