Health costs may haunt RomneyBy JENNIFER HABERKORN
October 27. 2011 8:21PM
It's also the fact that Massachusetts still has the highest health costs in the country - even after the reforms Romney signed into law as governor.
It's a problem his Republican challengers are beginning to use against him, and it's yet another health care issue that could keep him on the defensive in the primaries. But if he is the Republican nominee, it is unlikely to be a significant issue in the general election - in part because Obama can't claim that his plan has gotten health costs under control, either.
Texas Gov. Rick Perry has already gone after Romney on the issue, claiming the price of the Massachusetts reform law was too high. And Romney himself has admitted that his law didn't reduce costs - putting him in the awkward position of promising to do at the national level what he couldn't accomplish in his own state.
'It's absolutely right that there's a lot that needs to be done, and I didn't get the job done in Massachusetts and getting the health care costs down in this country is something I think we've got to do at the national level,' Romney said at a CNN debate last week in Las Vegas.
Romney never touted containing costs as the main objective of his Massachusetts health reform. Rather, he wanted all residents to have insurance.
But on the day he signed the reform plan into law in 2006, Romney did claim that cost containment was one of the goals.
'Lastly, but perhaps most critically, this bill takes bold steps to contain health care costs,' Romney wrote in a letter to the state Legislature. 'By putting an end to cost-shifting from the uninsured and from the Medicaid program, businesses and individuals will no longer bear the cost of others' health care.'
'This bill places critical health care cost and quality information in the hands of businesses and consumers. By creating cost and quality transparency, individuals will make more informed decisions about where and how to seek care,' Romney wrote.
In reality, though, Romney's advisers say reducing costs was an elusive goal that wasn't at the forefront of the Massachusetts plan.
Timothy Murphy, who was Massachusetts Health and Human Services secretary while Romney was governor, said he doubted the governor would have supported any cost regulations for philosophical reasons.
'People say we didn't do cost controls,' said Murphy, who is now president and CEO of Beacon Health Strategies, a managed behavioral health care company. 'I would never do that in a million years. … We didn't think it was the proper role of government.'
Romney's plan was much more focused on expanding access to health care than reducing costs, Murphy said. On that front, it was wildly successful. Today, fewer than 2 percent of Massachusetts residents are uninsured.
Murphy said one of the most important changes the law made was to move away from bulk payments to hospitals to help them cover the uninsured. Instead, the new model pays direct subsidies to help residents buy insurance.
The goal was 'to move from an opaque system of bulk payments to hospitals, where it is very unclear what care is being delivered, to an insurance model' in which hospitals have to submit claims, Murphy said.
Jonathan Gruber, the Massachusetts Institute of Technology economics professor who advised both Romney and Obama on their health plans, also said the key focus of the Massachusetts law was always to give people better access to medical care. Cutting costs, he said, 'was never the intention of the original bill.'
Both Gruber and Murphy said that when the law was crafted, it was assumed that lawmakers would likely have to come back for future reforms. Gov. Deval Patrick is now trying to get the Legislature to pass additional health reform legislation to reduce costs.
The state still has the record the highest individual premiums in the country. The average Massachusetts resident trying to find insurance in the individual market faced monthly premiums of $437 per person last year, according to the Kaiser Family Foundation.
Those with employer coverage didn't fare much better. The average family premium was $14,606 - $700 more than the national average - and the 10th-highest premium in the country, according to Kaiser.
But Massachusetts reform supporters, including Gruber and Murphy, said that's not because of the 2006 law.
'Massachusetts was always one of the most expensive states,' Gruber said. 'Reform hasn't made us more expensive or less expensive.'
Gruber said the cost issue is difficult at the state and federal level because no one has really figured out what needs to be done, and politicians have been reluctant to take the drastic steps needed to try new things.
'It's very easy to oppose things that are real cost-control measures,' Gruber said.
Murphy attributed Massachusetts's high health costs to its many pricey academic and research hospitals. He said many Massachusetts residents realize the high-quality care comes at a price.
But Massachusetts residents are worried about health costs, too. A poll by the Blue Cross Blue Shield of Massachusetts Foundation found that 78 percent of state residents see health care costs as a crisis or a major problem.
Residents blamed the health industry, Medicare or Medicaid, malpractice lawsuits and too much paperwork for driving up costs.
Robert Blendon, a lead researcher in the study and a professor of health policy and political analysis at the Harvard School of Public Health, said he expects the same would be true nationwide.
So far, Romney's fellow Republicans haven't attacked him for costs. They've largely focused on the law's similarities to Obama's health reform law.
But Perry has accused Romney of obtaining almost universal coverage at a high price - and that could open the door for Romney's other Republican opponents to do the same.
'Certainly, Gov. Romney made sure that everybody in Massachusetts was covered, and it also cost 18,000 jobs and it cost $8 billion,' Perry said on CNBC. The figures have been circulated by the conservative Beacon Hill Institute at Suffolk University.
If Romney wins the nomination, though, the issue of health costs in Massachusetts is unlikely to play a central role in the general election - because Obama would have a hard time making criticisms of Romney's record stick while Republicans are attacking the costs of his own health care law.
'I don't see Obama attacking Romney for not controlling costs,' Gruber said, because 'the Massachusetts plan did nothing to control costs' except in the individual market.
Compared with the national reform law, 'it's like doing nothing versus trying something,' Gruber said. He cited new but controversial ideas in the federal legislation, such as the Independent Payment Advisory Board, which is tasked with controlling Medicare costs.
Blendon doesn't expect Democrats to attack Romney on costs, either.
'I think [Obama] would more likely say, 'We learned from you. We took Romney's bill and now he's complaining,'' Blendon said.
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