Health Reform: Two Interesting Articles

There are a couple of interesting items in the Boston Globe this morning (www.boston.com). The first predicts a 40,000 primary care doctor shortage over the next decade. This would certainly slow the development of accountable care organizations and other forms of managed care. It may also mean that community health centers and public hospital outpatient departments (and ER's?) will be the primary service sites for new Medicaid enrollees created by health reform legislation. Whether the capacity exists to serve an influx of new enrollees remains to be seen, but the cost impact could be profound. My experience would suggest that persons with pre-existing and chronic conditions gravitate directly toward specialists, not to primary care doctors anyway. Many of the commercially uninsured who will now be able to obtain coverage will seek out specialists and hospital outpatient departments directly, even if sufficient primary care doctors were available.

The second item is an op-ed about the apparent intention of Massachusetts state government to control health care costs by capping insurance premiums and regulating hospital rates. The thrust of the piece is that from 1975 to 1991 the state tried to do this with little success. The piece also argues that capitated or global payments were equally ineffective. The authors' conclusion is that only a publicly administered single-payer system will control costs.

I see things a bit differently. While past efforts to control costs may have been unsatisfactory, it is clear that public sentiment and consumer demand have moved consistently away from managed care systems toward more and more freedom of choice. This drives cost in commercial markets more than anything else. If Medicare, which is the closest thing to a publicly administered single payer system we have, is any indication, the combination of freedom of choice and regulated payments is no panacea (see Medicare's comparative service utilization performance). But are the states and the federal government willing to exercise control over which doctors everyone(not just the Medicaid recipient)sees? I think not. As long as choice rules in private markets the only answers to controlling costs, short of good-faith public-private collaboration, are to stop government program cost shifting, curtail excessive hospital/physician consolidation, introduce more insurance products with significant levels of cost-sharing, make comparative cost and quality data transparent, and let consumers of health care vote with their feet.