Righting Health Care Reform in Massachusetts

In a November 2005 letter to the Legislature, more than 20 state business associations declared support for measures that would deliver health care cost controls to the state’s ambitious reform efforts. After lauding measures like investing in electronic health initiatives and creating cost transparency at hospitals, the business leaders wrote, “cost, after all, is the single biggest problem we face today in the delivery of health care.”

Unfortunately, that statement remains true today.

Despite national attention for the 2006 reform plan, health care in Massachusetts has reached a crisis point. More residents now have health coverage, but the crushing costs of the program endanger its long-term viability. This crisis has been brought about by the failure to address costs while focusing almost exclusively on access. For companies that have experienced years of double-digit increases for employee health premiums, the exploding cost of the health care law is not surprising.

During the debate, businesses successfully pushed for modest cost reforms. But even those appear to be stalling. Last week, the state’s most prominent champion of health care transparency, Harvard Pilgrim CEO Charles Baker, expressed frustration at the pace of making health care data available on the state’s Web site, which was a mandate of the 2006 law.

With its massive cost overruns and missed deadlines, the health care reform law is quickly becoming the Big Dig of the next generation, an ambitious and beneficial but deeply flawed public initiative with back-breaking costs to the taxpayers. Unlike the Big Dig, Massachusetts taxpayers, not Congress, will pay most of the health care tab.

Senate President Therese Murray deserves significant credit for proposing the first plan to address the serious challenge of controlling health costs without any new broad-based taxes. In particular, the increased investment in electronic medical records will benefit hospital efficiency and patient safety, while at the same time providing economic opportunities for Massachusetts technology employers. Murray also smartly proposed boosting enrollment at the University of Massachusetts Medical School, which already has one of the nation’s top primary-care programs. In addition, proposals to encourage doctors to enter primary care and practice in underserved regions of the state have significant merit.

However, the recommendation to ban many forms of interaction with doctors keeps the pharmaceutical companies from effectively educating doctors on life-altering drugs. This counters the stated goal of controlling costs, as evidenced by the lack of specific cost savings projections publicly attributed to this education ban. It is more of a political proposal than a fiscal one.

Marketing bans or restrictions are redundant because of federal law and could impact drug safety if critical information does not reach doctors or patients. Only a small percentage of drug compounds ever reach the consumer, and the state should not impose duplicative red tape that will hinder access to breakthrough treatments. For these reasons, the New Hampshire House of Representatives recently rejected a similar marketing restriction bill.

It would be shortsighted for the Commonwealth to commit $1 billion for the state’s life sciences industry while simultaneously undercutting biopharmaceutical employers that are expected to create jobs here. Last year, a High Tech Council study conducted by the University of Massachusetts discovered that from 2000 to 2006, 13 of the leading pharmaceutical firms invested more than $13.4 billion in state biotech companies — far outpacing venture capital biotech investment. The study revealed that this investment typically occurs during the early stages of drug development when many drugs fail due to lack of funding. If the state deliberately works against the biopharmaceutical sector, it is hurting the entire life sciences community, and ultimately patient care.

A much better idea would be to reform the state’s medical malpractice laws. Creating a system that minimizes frivolous lawsuits and provides protections to doctors would greatly stabilize skyrocketing malpractice premiums, which are driving many good doctors out of state. A 2002 federal study showed that reforming the nation’s medical malpractice system would save up to $108 billion in annual health care costs. As Baker said, Murray is “doing us a big favor by throwing the gauntlet down” on cost reform. Now all stakeholders in the debate must work together to make sure it is done right.-

Christopher R. Anderson is president of the Massachusetts High Technology Council. This article first appeared in the Boston Globe.