Zane: I remain deeply unsettled by wishful thinking

As Massachusetts legislators consider whether the health care "market" works well without more state supervision, they would do well to read this opinion piece by Ellen Zane, former CEO of Tufts Medical Center.  Some excerpts:

In what has become an annual rite, Massachusetts will hold public hearings on health care costs in early June. This year if you listen closely, you will already hear some providers and insurers warming their engines and arguments to proclaim “cost control is working, just give us time and don’t interfere with the market through government intervention or regulation.”

For the well-heeled, the system is working. The reality is that for most providers, and more importantly, for most consumers, it is not. An inconvenient truth about Massachusetts health care system is the fact that the income profile of where you live is a better predictor of what insurers will pay for your health care than almost any other factor. This reality has not been changed by any of the payment reform experiments currently under way, nor by anything that has been recently proposed. So I remain deeply unsettled by wishful thinking that our market will solve our health care cost problem if left to its own devices.

The belief in market-based solutions is predicated on the proposition that the parties most responsible for creating a two-tiered market — health insurers — will voluntarily change course. The reality is our state’s health insurers have long been the de facto regulators of the marketplace. ...In most instances, these disparities exist even though providers deliver the same services in largely the same way, with equal if not better quality. To dispute this is to argue that the extensive, groundbreaking cost and quality research done by the Massachusetts Attorney General’s Office and the Massachusetts Department of Healthcare Finance and Policy over the past few years is without merit. 

As we move from traditional fee-for-service models to global budgets, we must make sure that the same disparities that have distorted our fee-for-service payment system are not enshrined in perpetuity in a global payment system.