Massachusetts Cuts Health Care, ACOs to blame

The Massachusetts Romney care model is on the march, with ACOs part of the mix.  Healthcare can be cut, and the patients be damned.

Last Tuesday, Massachusetts Governor Deval Patrick signed the second phase of Romney's 2006 health care plan into law. To recapitulate: phase one, known as "Romneycare", mandated that every citizen of Massachusetts obtain a state-government-regulated minimum level of healthcare, gave free coverage to citizens at or below 150% of the Federal Poverty Level (FPL), and set up insurance broker exchanges to offer private plans to residents. These three aspects of "Romneycare" are precisely what is to go into effect, nationally, under "Obamacare's" October implementation.

The "phase-two bill" is being used as an experiment to end the "fee-for-service system" and put in place a new approach requiring the compensation to hospitals and doctors be made on the vague basis of "overall patient care". Whereas this has been piloted across the nation already in 32 participating hospitals operating as "Affordable Care Organizations", as specified in the ACA, this is the first time for an entire state to make the shift mandatory, as it now is for government agencies like MassHealth, the GIC, and the Connector exchange.

The new law also prevents healthcare spending from growing faster than the state's economy, through 2017. Then, for five years after that, spending slows further, to a half a percent below the growth of the economy. Medical spending in Massachusetts has grown 6-7% annually in recent years, while the state economy has only grown about 3.7%, which means the growth of medical spending will have to be halved to satisfy the new law. $200 billion in total will be cut. And on top of that, due to effects of sequestration, Medicare has already been cut 2 percent in the state.

It is not just Medicare taking a hit; medical research is also being targetted. Sequestration has cut 5% of the federal National Institutes for Health (NIH) funding, and the cut will be increased to 8% next year. The budget for NIH, which is the largest source of medical research funding, has declined 20% since 2003.

"When you look at the top five independent hospitals in the country that receive NIH funding, they're in Boston," said John Erwin, executive director of Conference of Boston Teaching Hospitals.