Ever since Massachusetts enacted health reform three years ago, requiring coverage but deferring cost controls, the state has been waiting to see who would impose a model for reform and what that model would be.
Despite these efforts Massachusetts remains a high health care cost state, as the Dartmouth Atlas reported last month. Medicare cost increases are moderating, but in 2006 it still cost $8,671 to cover an average Medicare patient in Boston, against $6,783 in Portland, Maine.
The Dartmouth study blamed decisions by doctors based on the high availability of hospital beds, imaging centers and other high-cost centers, along with the payment system, for the disparities.
In other words, having a lot of sellers in this market raises costs, it does not lower them. Creating real competition among health care suppliers is going to be the hard part of health reform, and necessary if insurers are to retain their place in the system.