Health Care In Massachusetts: 'Abject Failure' Or Work In Progress?

Voters are hearing a lot about health care this year. Republicans want to make the 2012 elections a referendum on the health care law that President Obama signed two years ago.

That law was largely based on one that then-Gov. Mitt Romney signed into law nearly six years ago in Massachusetts.

Romney is now a GOP presidential contender, and that has made the Massachusetts universal health care law a political football. Romney's rival Rick Santorum recently called it "an abject failure."

Heard On 'Morning Edition' Health Care Health Care In Massachusetts Turns To Cost Control Health Care In Massachusetts Turns To Cost Control Listen · 4:36 4:36

But "Romneycare," as Santorum and others call it, isn't controversial in its home state. And a lot of people there don't call it Romneycare because it took the support of a lot of other people — Democratic legislators, business leaders, insurers, hospitals and doctors, consumer groups — to get it passed.

But it's true that Romney got the ball rolling. When I interviewed him in 2006, Romney said he got the idea from talking to Massachusetts business leaders.

"The key insight was this: People who don't have insurance nonetheless receive health care — and it's expensive," Romney said.

Romney saw a state fund set up to provide free care — paid for by a growing surcharge on private insurance premiums — was spending a billion dollars a year.

"My question was, could we take that billion dollars and help the poor purchase health insurance — let them pay what they could afford? We'd subsidize what they can't," Romney said.

Universal Health Care: How It's Working In Massachusetts The percentage of uninsured people has gone down. Nearly everybody in Massachusetts has health coverage, while the rate of uninsured nationally has gone up to one in six. The proportion of employers offering health plans has gone up in Massachusetts, despite fears that availability of government-subsidized insurance would "crowd out" employer-sponsored coverage. Nationally the rate is believed to be static. Notes *This figure may be a statistical anomaly. The rates in 2009 and 2011 were close to 60 percent, the same as in 2005. Access to health care has improved in Massachusetts, while emergency room visits have gone down — possibly a sign that people with insurance are more likely to have a regular source of care. Self-rated health is improving.

And he proposed a requirement that people buy private health insurance if they're able. That's the "individual mandate" that has become a curse word in Republican politics these days.

"We're going to say, 'Folks, if you can afford health care, then, gosh, you'd better go get it,' " Romney said back in 2006. " 'Otherwise you're just passing on your expenses to someone else.' That's not Republican, that's not Democratic, that's not Libertarian — that's just wrong."

Flash forward to 2012. Romney's successor, Democrat Deval Patrick, says the health plan Romney launched is no abject failure — it's working.

"I think it's just been a terrific success," Patrick said in an interview. "And [it's] a statement of value — about our values here, about how people aren't all on their own, that we are in this together."

Patrick says no state can match Massachusetts' record of getting more than 98 percent of its citizens insured for health care — and virtually every last child. And, he boasts, "It has cost the state about 1 percent in additional new state spending."

The Massachusetts law has had strong and steady support — and little opposition. Last year, an attempt to repeal the "individual mandate" — the part that requires most people to have insurance — couldn't get enough signatures. Last week, only 39 people had "liked" its Facebook page.

To get an idea of how it's working at the ground level, I stopped by the office of Dieufort Fleurissaint, a self-employed Haitian-American businessman. He has a tax prep and insurance business. He's also an evangelical minister who worked with the group Greater Boston Interfaith Organization, which helped get the health law passed.

"Close to 500,000 people didn't have health insurance," Fleurissaint says. "Now, because of the passing of the law, they have health insurance."

And one of them, it turns out, is Fleurissaint. He used to be a mortgage broker, but his business crashed in 2008. He couldn't pay his health insurance premiums.

But under the new law, Fleurissaint qualified for state-subsidized insurance.

"My premium ... dropped from $1,200 on a monthly basis [to] $770 for the same coverage for the same family of four," he says. And when his income dropped again during the recession, so did his health insurance costs.

"The law has been extremely good for me," he says, but he admits that not all his business colleagues like the law.

"They complained that they were forced, basically obligated to purchase health insurance," Fluerissaint says. "So I explained to them that it's much better to have health insurance than not having it."

In fact, despite some initial grumbling, more Massachusetts businesses of all sizes have begun offering insurance.

When I called the Massachusetts Restaurant Association, it said it didn't know of any members that don't offer coverage. That was surprising, since restaurant owners have been among the most opposed to health laws like this one.

Similarly, Bill Vernon, who heads the Massachusetts office of the National Federation of Independent Businesses, says the law "works for Massachusetts." The NFIB is a plaintiff in one of the lawsuits challenging the constitutionality of the Obama health plan that will be argued later this month before the U.S. Supreme Court.

But in Massachusetts, Vernon says, "my guess is that we would probably be pretty much split on the issue of whether to repeal the law or not. That suggests repeal is not something we would favor. And I don't think it's politically realistic, either."

Likewise, the individual mandate has not met with nearly the resistance that many predicted.

"The sky did not fall," says Andrew Dreyfus, president of Blue Cross Blue Shield of Massachusetts, the state's largest insurer. "And by the way, we have much stronger penalties around the individual mandate than the national law has, and despite that, the sky did not fall."

The penalty for not buying insurance can be on the order of $1,200 a year for a 37-year-old single person in Boston. But only about 1 percent of taxpayers end up paying any penalty.

Meanwhile, a new study in the journal Health Affairs shows that more Massachusetts citizens are seeing a doctor regularly, fewer are going to emergency rooms for care, and the percentage who rate their own health as "good" or "excellent" is going up.

But that doesn't mean everything about Massachusetts health care is wonderful.

The 2006 law didn't do anything about controlling the state's health costs, which were already among the nation's highest.

So now the conversation in Massachusetts has turned to cost control. And some very interesting things are beginning to happen.

They didn't happen overnight. When Patrick took over the governor's office in 2007, he called together top insurers, hospital executives and doctors to talk about controlling costs. He says it was an exercise in frustration.

"I finally lost my patience," Patrick says. "Because they'd sit around the table and everyone would start their response the same way — 'Well, governor,' they'd say, 'it's complicated.' "

Patrick says the insurers would point to the hospitals, the hospitals would point to the doctors, the doctors would say it's malpractice suits or red tape or the imaging center down the street.

Patrick says he got fed up. "I understand it is complicated," he says. "But the point is, we have to stop being defeated by that complexity."

So, two years ago, the governor directed his insurance commissioner to exercise a little-used power to turn down a requested rate increase because it was excessive. Not every state has this power.

Insurance companies were outraged. But Dreyfus of Blue Cross Blue Shield now says it was a pivotal point.

"It sent a message to the entire health care community and the business community that we had to change," Dreyfus says.

And change seems to be happening. Insurers have torn up their contracts with hospitals calling for annual reimbursement increases of 8 percent and 10 percent, and negotiated agreements providing for 3 percent, 2 percent and even zero percent increases.

Blue Cross Blue Shield has persuaded some of the state's biggest hospitals, and thousands of doctors, to accept a new kind of payment. Instead of getting paid every time they do something — a venerable system called fee-for-service that encourages them to provide more and more services — they're paid a fixed amount each month for each patient.

That was tried in the 1990s, and it failed, largely because of backlash over its incentive to stint on care. The new wrinkle is that this time hospitals and doctors have to meet 60-some different quality measures to show they're not cutting back on care.

Dreyfus says a third of his company's 2.8 million subscribers are now on these so-called "global payment" plans, and he's hopeful that most of the state will be on this kind of reimbursement within the next two to three years.

The various steps seem to be working to moderate Massachusetts' historically high health care inflation rates. "We've got some more work to do here," the governor says, "but average premium increases were almost 17 percent two years ago. They are less than 2 percent right now."

But he doesn't trust that it will automatically go on that way. Patrick and many others, inside and out of government, say Massachusetts now needs some legislation to lock in these changes and go further — cut down on administrative costs, reform the malpractice system and other innovations.

The big idea you often hear these days is to hold total Massachusetts health spending to a target tied to the state's overall economic growth.

"I want to assure ... that it's sustainable," Patrick says, "that we don't continue to have increases above the rate of growth in the economy." Otherwise, he says, health care will "eat up everything else."

Legislators, who are wary of tampering with a health sector that accounts for 20 percent of the state's economy, are expected to come up with their own proposals this spring.

But significantly, no one is talking about repealing the 2006 law. Not even businessmen like Fred Difinis, who runs a small business selling parts for playground equipment. He's unhappy with the Massachusetts health plan because it requires him to buy coverage for prescription drugs, which he says he doesn't need.

"I'm not sure I necessarily want to see the law repealed," he says. "What I want to see is some balance on the cost side of the equation."

If Massachusetts can do that, it might become a national model — again.