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Massachusetts health care — wonky, with a healthy dose of reality

Take THIS to the Beach: New Book on Medicare Prospective Payment

Take THIS to the Beach: New Book on Medicare Prospective Payment

August 4, 2007

So, just maybe, we're warming up for a serious policy conversation in Massachusetts on controlling costs. True or not, I'd like to offer a reading suggestion for everyone who wants to participate. A 2006 book by Rick Mayes and Robert Berenson: Medicare Prospective Payment and the Shaping of U.S. Health Care (Johns Hopkins University Press). Take THAT to the beach!

We often act in MA health policy as though Medicare doesn't exist. It does, and probably has a more profound influence on the direction of the MA health system than anything we do here. This book describes the 20+ year process by which the entire Medicare program moved from a provider-driven, cost-based reimbursement to prospective payment -- first for hospitals in 1983, then for physicians in 1989, and then for nearly every other provider in 1997 and 2003. Good results, bad results, unclear results, unintended consequences, political intrigue -- something for everyone here. The only conlcusionon which every one should agree, the results have been profound.

Memo to Rudy Giuliani -- it's not the market that has changed US healthcare, it's top-down government policy that repeatedly prevented Medicare from bankrupting the federal government.

Political observation -- each major change happened because a) the government got into a severe fiscal jam, and b) the providers agreed to the changes fearing something worse would happen if they did not.

I know this recommendation places me in health-wonk-hell to many. I don't care -- this slim book (156 pages of small text) is a must read. By the way, Partners Chief Jim Mongan and Heller Dean Stuart Altman have recurrent roles.
John McDonough