Health Care Econ-101 For Governor

During an appearance on WTKK-FM today, Governor Patrick dipped his toe into the uncompensated care pool controversy that has been splashed over the pages of The Boston Herald. Here and here.

Some highlights (lowlights) from the Inspector General’s report that sparked the stories have been:

• $7 million on care for non-Massachusetts residents. Claims were paid out for patients with home addresses in 48 other states, and a handful of foreign countries.
• $17.8 million for more than 60,000 “medically unlikely” or “medically unnecessary” claims, such as foot X-ray charges for patients suffering from headaches.
• Suspicious claims for gender-specific procedures for members of the opposite gender. (Such as gynecological bills for men)
• $6 million for 13,000 duplicate claims.
• 45% of those seeking free care reported no income. I will say that again no income—no paycheck, no welfare, social security, no money coming in at all, private or public assistance. How can that be?

But the Governor’s comments on the matter should concern residents of the Commonwealth for the breathtaking ignorance of basic economics. According SHNS ($), the Governor said

This is a $430 million program. $400 million of it does not come from taxpayers, it comes from assessments on hospitals and [insurers]. It is to cover what are otherwise uncovered events, mostly emergencies

Governor, with all due respect, where does that $400 million come from? Do you really think that insurers and hospitals have a huge pool of extra reserves to pay that assessment? Don’t you think hospitals will charge more for services to make up the difference? Who pays that increase– patients and insurers. How do insurers make up their assessment and the hospitals higher prices? Increased premiums—which of course get handed down to taxpayers. Which brings us to his most recent crusade against insurance companies and for cost containment–in the same interview he is quoted as saying

he’s had enough of insurance companies who say they can’t do anything about soaring premiums. “I’m sick of their excuses. I want the premiums down. Not just leveled off, but down,” Patrick said, his voice rising.

Talk about disconnect.