More Evidence I Was (Unfortunately) Right About The “Massachusetts Miracle”

Reuters files an update about the Massachusetts health reform law as reality starts sinking in:

“Now comes the tricky part, say policy experts and people involved in Massachusetts’ law: designing affordable plans for the many uninsured people whose earnings put them only slightly above the poverty line.”

Here’s one problem:

“A state board created to help arrange coverage is reviewing those standards following estimates that the average uninsured individual would need to pay $380 a month for health coverage.”

Officials say that is too high.”

A Boston health administrator explains the obvious:

“‘The penalty in the first year is the loss of your personal tax exemption. For a working poor person that can range from nothing to $150 a year. Why would you buy health insurance at a cost upwards of $3,000 a year if you’re relatively healthy and the penalty is likely to be $150?’ he said.”

Here’s what I wrote at the time (and I felt like a voice in the wilderness, as politicians and bigshots congratulated and high-fived each other):

The fine for not participating in year 1 is $150. Premiums will be in the thousands, even with subsidies - and that’s for the healthiest pool of candidates, young adults. (Others are guessing $2,400, but I’d be willing to go as high as $3,000.) So participation in Year One will be limited to people who have every reason to believe they’ll get $2,000 or $3,000 worth of care out of the system. They’re likely to be pretty sick folks.

So, as a refresher, here’s what happens next. The insurers will have horrible underwriting experience as only the sickest buy this coverage. Then they’ll raise their rates even more in year 2. Lower-income people will have the chicee of paying usurious rates or becoming tax refugees, to all intents and purposes.

It’s supposed to be satisfying to say “I told you so.” Not in this case.

The Market for Primary Care IT

As reported earlier here in The Sentinel Effect, there are interesting R&D and investment opportunities in primary care IT. This opportunity is complicated somewhat by the fact that there are only half as many primary care doctors in practice now as there were ten years ago.

That means the potential customer base has shrunk, but at the same time - as the California HealthCare Foundation observes - the need is greater for those docs that remain. The CHCF’s news item is based on a Wall Street Journal profile of a primary care doc who’s using technology in an attempt to run a profitable “micropractice.”

Primary care physicians don’t make very much money in this country, which is a sign of the inverted economic priorities in our healthcare model. (HMOs were, ironically, an idealistic concept when they were first being designed. It was thought that under this model the HMO would have a financial incentive to keep people well. An increased role for primary care, with better reimbursement, was a hoped-for but never realized side benefit.)

Smaller potential market, exponentially greater need. And as we wrote earlier, U.S. primary docs lag well behind their European counterparts in access to IT and health information. Our conclusions?

• The remaining market is big enough to be profitable for somebody.
• The need is substantial.
• Healthcare reform, if any, will increase that need.

Primary care IT needs to move into the 21st Century.