The sobering lessons of health reform in Massachusetts.

How to fix health policy.
June 23 2009 6:45 AM

Bringing Down the House

The sobering lessons of health reform in Massachusetts.

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But that's not the whole story. Health care costs are rising everywhere, even in places like Minnesota, which Gawande cites as a prime example of low-cost, high-quality care that should be replicated nationwide. (Per capita health spending is actually 25 percent higher in Minnesota than in Texas, which has a hospital system that Gawande criticizes for profiteering.) In Massachusetts, some employers offering high-quality plans have annual rate increases of 10 percent to 15 percent. These jumps are certainly due to some overuse of services but also indicate increasingly high-technology care.

The lesson of Massachusetts is that really good health care is also really expensive. The concern isn't who writes the checks or who writes the bills. The real question is who makes the tough decisions about the limits of the checks and bills—in other words, who ultimately rations the money. Not everybody can have everything, and the sooner we admit that, the sooner our health care debate will get realistic.

In the haphazard Massachusetts plan, rationing fell to individuals, who then skimped on important prescriptions and routine visits. Gawande would leave rationing to properly incentivized doctors, but we have no data about whether this can be done widely. Others advocate for bodies like the Medicare Payment Advisory Commission (an impartial medical Federal Reserve Board), which can make the hard calls to promote and limit certain kinds of medical care. Britain, for example, has a national institute that makes precisely these decisions, like limiting drug-eluting stents for coronary artery disease and certain pricey drugs for kidney cancer. And health insurance executives here are again talking about "capitation," or fixed global budgets in which a group of health providers gets fixed monthly fees to handle all of a person's health needs.

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In the meantime, one thing is sure: Without a smart plan to ration our resources well—that is, stick to a budget—and improve health, simply mandating that employers and individuals buy health insurance will only worsen the mess.

Darshak Sanghavi, a pediatric cardiologist, is a fellow of the Brookings Institution and Slate’s health care columnist. Follow him on Twitter.