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Massachusetts and the high price of health care

A doctor reads a blood pressure gauge.

Sarah Gardner: Health care has become one of the biggest and most contentious issues in the presidential election. Obama's running on his reforms. Mitt Romney is running against them. The two men don't agree on much, except that something needs to be done to bring down costs. And if the past is any indication, it's not going to be easy.

Before Congress passed the new law expanding health insurance, Massachusetts did it when Romney was governor. Today 98 percent of residents there are insured and Massachusetts has the highest per capita health care spending in the nation.

From New Hampshire Public Radio, Dan Gorenstein reports.


Dan Gorenstein: There's this persistent myth about health reform that's pretty common, even in health policy circles.

Ashish Jha: If we could just give everyone health insurance, somehow we would save billions and billions of dollars.

That's Harvard Public Health Professor Ashish Jha.

Jha: It turns out empirically it's not true.

If anything, the health reform experiment here has proven insurance doesn't equal savings.

Jha: I always say, if the goal is to save money on health care, the best way to do it is just deny everybody health care.

Jha says the secret about giving people health insurance is they use it. Folks who had held off going to the doctor -- scared for their wallets -- now are making appointments. So, spending continues to rise 4-7 percent a year. Everyone agrees that's unsustainable, and in Massachusetts now it's against the law. This summer legislators passed a plan that says health care costs can grow no faster than the state's economy -- that means health care increases must be cut roughly in half.

But even before the legislation took effect, insurers, hospitals and doctors were on the sacred quest to save money.

David Elvin: It's great to make people healthy. It's really spectacular to make people healthy and save people money at the same time.

Dr. David Elvin and the team at the Cambridge Health Alliance hospital group have targeted their 400 sickest and most expensive Medicaid patients.

Elvin: We are talking about patients that inexplicably seem to be costing a lot of money and are clearly not getting better.

Like this one woman with diabetes.

Elvin: Her numbers they were just getting worse and worse and worse.

Elvin dispatched his staff to investigate and after digging into this woman's life a little, they found out...

Elvin: This person's child, the adult child, was stealing her medications and selling them. And each month she just promised herself that she would keep the medicines safe. And each month he would come into her home and rob her.

At that point, Elvin and his staff did something unusual.

Elvin: We accompanied her to court and got a restraining order.

The patient held onto her meds, got better and costs fell. Elvin says he's got lots of stories like this, which is why the new program is on track to reduce spending by 3 percent. He says here's the lesson: if doctors really want to bend the cost curve, they've got to address whatever gets in the way of their patients getting good care.

The state's top insurance companies are also changing the way they operate to save money. Doug Thompson works with Elvin on the business side. He says there is a growing move among insurers to give doctors and hospitals a lump of money, say $5 million to manage 1,000 patients a year.

Doug Thompson: More and more here in Massachusetts each patient will be part of a budget.

That means questioning every test, every procedure, every prescription.

Thompson: And we will need to manage those resources even more than we did in the past.

Under these deals, the more money the docs save, the more they make -- and if patient health improves, bonuses kick in. If they go over budget, doctors and hospitals may owe the insurance company money.

That's why guys like Gene Muise have become a hot commodity.

Gene Muise: I am a licensed pharmacist in Massachusetts.

Muise works for a group of doctors, the Mount Auburn Cambridge Independent Practice Association (they call it MACIPA). He's the guy who keeps the drug costs down.

Muise: I look at the drugs that are available, I look at what those drugs cost... And what I do is, I provide that information to our physicians so that we can make a choice on what drug is best for the patient.

Dr. Barbara Spivak is president of MACIPA.

Barbara Spivak: I have a patient who has 18 different problems and 25 different medicines. If you look at one of the most common reasons why people get sick it's because of confusion about their pills.

These new contracts are forcing doctors to make tough decisions about the things they do every day, and it appears to be working. Blue Cross Blue Shield of Massachusetts, the state's largest insurer, says it reduced costs by more than 3 percent last year.

The Blue's Dana Safran says numbers like that means matching spending increases to inflation is within reach.

Dana Safran: We have to get health care spending growth look more like the rest of the economy so that health care isn't eating everybody else's lunch.

Safran says health reform 1.0 -- getting everybody insurance -- is in the rearview mirror.

Health reform 2.0 -- solving out-of-whack cost increases -- that's still a long road ahead.

I'm Dan Gorenstein for Marketplace.

About the author

Dan Gorenstein is the senior reporter for Marketplace’s Health Desk. You can follow him on Twitter @dmgorenstein.
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The high prices of healthcare systems are suffered as well as affect peoples. Therefore people are not enough consistency to get better healthcare services within a low cost; as healthcare is now being one of the biggest challenges for the nation so health organizations are liable to pay their regular attention for delivering proper healthcare system to the public.
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I have said for years that this idea that we would "save money" if everyone had health insurance was not true. All having insurance does is increase the likelihood that a person will use the system. We see it all the time in the EMS service. People have Medicaid and they don't go to the doctor for "preventive" care. they come to the Emergency Department first. Then they follow up with the doctor they should have gone to first.

This "lump sum" of money (~$5,000 to spend on each patient per year) is not liked by the people under it here in Cleveland. Doctors avoid tests, reduce the time seeing patients, and give less treatment to stay under the treatment cap. This does save money but at what cost? At least one mans leg that I know of.

We switched from the Cleveland Clinic to University Hospital because the doctors stopped treating us as having health problems and started treating us like burdens on the system. My Spouse fell and hurt her foot. The Doc poked it and said "keep wrapping it in a bandage and try to stay off it for the next few weeks." Two weeks later it still hurt. Doctors office would not set another appointment for four weeks because it was too soon between visits. Foot still hurt, so the doc prescribed OTC pain relief. (Prescribed so we could use our FSA). A month later the foot still hurt and went to an out of network urgent care down the road, they poked it, and then did an x-ray to find a fracture in the foot.

We went back to the Doctor and asked why they did not x-ray and were told that those are expensive when most of the time the pain from a fall is mostly a sprang that will heal on its own if you stay off it and take some pain relief. So why "waste time and money on x-rays when most of the time it is nothing." But hey! the Doc reduced the cost of health care! Yeah!

The US no longer has "healthcare," it has a "for profit medical business" that has no interest in reducing costs or improving care. And like many businesses, it lobbies our government with a $billion budget to promote its interests. Look at Florida, where the governor, Rick Scott, is a past HCA executive. Hospital Corp of America, founded by the Frist family of Nashville (Remember Bill Frist in Congress?) pioneered the "for-profit hospital" and among other discretions, has been involved in securities fraud and medicare fraud, for which they paid almost a $billion fine. Think he's going to try to rein-in this mess?
How about the drug companies who pay $billions in fines every year for their marketing of drugs outside FDA approvals and other illegal activities but simply consider it another cost of doing business?
How about doctors who own or invest in labs? Surveys have shown that they prescribe 4 times as many tests as other doctors. Makes more profit for them.
And finally, hospitals and doctors create an environment where most of the lifetime cost of medicine is charged in the last few months of life, where high cost treatment keeps patients alive a few months, usually in pain or coma.
What a screwed-up system!

You sound like all doctors and health care providers are crooks and cheats. Really? I would say that MOST of the doctors and health care providers are not in the business for some huge profit. I am not a doctor but I live near quite a few and hear their worries about many of their patients cases. And they worry about how to change their patients choices...in the 10 minutest the insurance give them for each patient?? They are in it for the care of others. And I notice you say nothing of the lawyers...like the ones in our government that will not do anything about tort reform. Doctors have to defensively have test done so the occasional jerk that wants to make the 'rich' doctor pay. Absolutely, there are doctors that should have their license taken away. But by and large, most doctors are doing their best to help their patients but that also includes trying to protect themselves from frivolous law suits. It is not the doctors that are in charge here. It is the insurance and lawyers (read..government lawyers - legislators..talk about self interest). These are the people you need to 'go after'. And by the way, the government did not pay for most of them to go to school...do you have any idea what they have to go through to get out of med school?? How long it takes them to pay off their education? How old they are when they finally get to practice and earn a living? like surgery? And to have the insurance and government in charge of what they are allowed to charge for their services and how they run their business..back to the 10 minute patient visit..I personally want my doctor to be paid a fair price for his very expensive and highly educated services. Complain about the lawyers in our government and their self interest and the insurance for profit. These are the ones that make medical practice such a hazard to a doctor and his patients. Would you want to have to deal with the government idiots daily?

Insurance isn't the whole answer, but it is *part* of the answer. What really has to happen to drive costs down? First, we - patients - need to ASK QUESTIONS. Like "how much will that cost" and "do I really need to be taking TWENTY-FIVE medications". Second, access to health insurance needs to be forever severed from employment. We *should* be buying our own health insurance. Then employers could offer some premium help as a true benefit, versus the current system of "make business pay for healthcare" - which is crazy. Talk about your job-killers ...

"...one of the most common reasons why people get sick it's because of confusion about their pills." So as long as this person properly takes 25 (*25*) medications they are OK/not "sick"??? Good lord - this is the root of the problem. It's ridiculous to be on that much medication. Even 5 medications is absurd. I'd bet this person is a (barely) living example of every possible poor lifestyle choice - too much of all the horrible-for-you foods and zero healthy. Probably rides around on one of those scooters chain smoking along the way. NPR/Marketplace - how about more stories that focus on promoting better choices in order to avoid the horrible and horribly expensive reliance on the pharmaceutical industry to maintain people at a profitable stage of sickness?

You know what else is untrue about healthcare? That it costs jobs. Massachusetts unemployment rate in July was 6.1%. The US national unemployment rate was 8.3%

Yay - a path to full-employment?! Let's get half the population chronically sick & drug-dependent and have the other half treat them. I should point out in light of the high healthcare costs in MA, it can't be a coincidence that they are the birthplace of Dunkin' Doughnuts, in addition to being the biggest per-capita consumer of ice cream in the US...

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