What Mitt Should Say

This is a speech Mitt Romney should have given last year. It may even work this year. If he waits until next year, I’m afraid it will be too late.

My fellow Americans,

As governor of Massachusetts, I presided over the most important state-level health reform in our nation’s history. From that experiment I’ve learned a great deal about what works and what doesn’t work in the ongoing effort to lower costs, raise quality and improve access to care.

We accomplished four things that are worth emulating nationwide.

First, we cut the number of uninsured by more than half in my state. If that were replicated nationwide, we would have 25 million newly insured citizens.

Second, we insured the uninsured mainly by using money already in the system (for Medicaid and emergency room care), not by raising taxes or cutting benefits for the elderly and the disabled — as ObamaCare does.

Third, we created tax fairness. Massachusetts is the only state in the union where employees get the same tax relief for health insurance, whether it is provided at work they purchase it on their own. This is in contrast to the arbitrary and unfair way the tax system treats people in other states and the much greater unfairness people will be subjected to under ObamaCare.

Finally, we put partisanship aside and sought everyone’s help in achieving these goals. Left and right, Democrat and Republican — all worked together toward a common end.

On the other hand, there are things we did that I would not recommend to others.

First, there is no need for a mandate. In Massachusetts, as in other states, people pay lower taxes if they insure and higher taxes if they do not. We have added additional subsidies and fines in my state to make being insured even more attractive. These financial incentives alone account for almost all of our success in insuring the uninsured. Once the government starts dictating the content of everyone’s insurance plan, however, the special interests set in, bloating the benefit package and making it prohibitively expensive. By making health insurance expensive and one-size-fits-all, mandates actually defeat the goal of universal coverage.

Second, while increasing the number of people with insurance, we did not create one new doctor or one new nurse. Nor did we deregulate and allow insurers and providers of care to get out from under a mountain of regulations that prevent cost-effective products. As a result, the wait to see a new doctor in Boston is longer than in any other U.S. city. Our emergency room traffic is higher today than before the reform!

I believe the supply side of the market can accommodate a large increase in the number of insured, but only if we give them the freedom to meet the new demand efficiently.

Third, in Massachusetts we adopted the same model of managed competition that is in HillaryCare and in ObamaCare. I like the idea of people choosing among competing health plans. But under managed competition, the premium is the same for everyone, regardless of expected health care costs. That means insurers try to attract the healthy and avoid the sick. After enrollment, the health plans face perverse incentives to overprovide to the healthy (to keep the ones they have and encourage the enrollment of more just like them) and underprovide to the sick (to encourage their departure and discourage enrollment by any more of them).

A better model is the Medicare Advantage program, where seniors also have choice and competition. But in that system, the federal government goes to great lengths to try to ensure that the premium paid for each person matches as closely as possible that person’s expected costs. Because the amount the government pays for each senior can differ by ten-to-one or more, insurers compete just as aggressively to enroll a cancer patient as they do to enroll a healthy patient. I believe we can do something similar for the nonelderly population.

Finally, you cannot allow people to game the system. In Massachusetts, some folks remain uninsured while they are healthy, obtain insurance after they get sick, and then drop their insurance again after they get their medical bills paid. We call these folks “jumpers and dumpers” Under ObamaCare we are about to repeat this mistake nationwide. We do not allow people to game the insurance system with impunity in other federal programs. It’s not allowed in Medicare Part B, in Medigap insurance or in the Medicare drug coverage program.

Were I president of the United States, I would take these lessons to heart. I would replace ObamaCare with a workable health system — copying what works and avoiding what doesn’t work, based on my experience in Massachusetts.

I believe I am the only candidate who actually knows how to do that.

Comments (17)

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  1. TDP says:

    A solid post, John. Romney thus far seems to be taking the standard approach favored by perceived front-runners in both parties over the decades — avoid specifics and try to fundraise a path to success. This approach has been favored because it has worked.

    Here’s to hoping that 2012 is the year when we citizens demand that real problems get addressed with real solutions. Your post would be excellent fodder for a real debate.

  2. Devon Herrick says:

    The New Yorker had a rather interesting article titled… “Romney’s Dilemma: How his greatest achievement has become his biggest liability.”

    “Romney initially thought that his health-care plan would help him politically.” But it’s difficult for the Affordable Care Act not to hurt Romney politically, when the single most important repeal initiative for Republicans is the result of a law Romney helped pass when he was governor. President Obama has publically touted Massachusetts as the model for an unpopular health care law.

  3. Donna Baver Rovito says:

    Brilliant. But I think it may already be too late for Romney to take this position, since he’s defended it on the basis that it was OK to enact a mandate at the State level, and that’s why it’s not OK for the federal government to do it.

  4. ralph weber, MediBid.com says:

    I think he left out a few things. He forgot to mention that he greatly reduced access to physicians which will be very useful when they need to start rationing, and he also forgot to mention that the MA DOI is forcing private companies to operate at a 19% loss which will accelerate the day when they will go out of business and either need to be bailed out, or the state will take it over.

  5. Rick Weber says:

    While this would be a wise move politically, it would leave us with a further widened scope for government involvement. In an economic sense this isn’t bad per se (although such reduction in liberty is pretty offensive to my sensibilities), but there are good reasons to expect that it will have negative economic impacts.

    Because the feedback mechanism of government is the vote, the more programs that require feedback (i.e. the greater the scope of government), the more difficult it is to ensure that any given program will be properly managed–this problem won’t affect just health care, but will result in lower quality of everything government does (education regulation, freeways, police, etc.)

    Besides the information costs faced by policy makers, increasing the scope of government also increases the information costs of voters. If I’m voting on three government services, I stand a chance of being an informed voter. When the government has as many hands in as many pies as it does now, I don’t stand a chance of knowing who voted in what way in exchange for what.

    And of course with these high information costs (on both ends), comes the public choice issues you should already be familiar with.

    I would not be willing to support any new government policy unless it came with a reduced total scope of government. I would be willing to turn away an enormous amount of good policy if it took attention off the more fundamental issue: we need to get rid of all the bad policy we’ve already got, reduce the scope of government and give our form of democracy some *chance* to succeed.

  6. hxtrade02 says:

    hi

  7. Ken says:

    Brilliant post. Of course Romney should give this speech. It still may not be too late.

  8. Allan says:

    I don’t necessarily agree with all the points as I feel some are not entirely market based nor fair, but it is a compromise so I won’t deal with the actual points. Romney has to say more than “I would replace ObamaCare with a workable health system “. There is a trust factor here so he has to be absolutely clear. He must say ‘under no circumstances will I support amending the present bill in any fashion because the bill is totally unworkable and was passed without due scrutiny of the public and Congress. The bill must be totally repealed.’

  9. Dr Bob Kramer says:

    Well said!! Health care should not be a partisan football. Why can’t the guys in DC figure that out. There are enough bright and concerned to elevate this above the political level. It is time we return to non-partisan decision making and do whatever it takes to make a solution that works.
    Dr Bob Kramer

  10. twpauken says:

    Excellent column, John. Tom

  11. MArk says:

    Dear John,

    I hope you are Mitt’s new speech writer! Excellent job…..I’ve sent this around to some friends who are Mitt’s supporters. Unfortunately, he’s sticking with his book title “No Apologies.”

    Cheers,

    Mark

  12. Stan says:

    John,

    I am afraid it is lost cause for poor Mitty.

    I am glad you are joining the administration ‘s plan finally and becoming part to the team!

    We will accept any good ideas. I wish your side had been active for 8 years before BO came to office and worked on the some solutions before.

    Stan

  13. Earl Grinols says:

    Good advice. But in politics things sometimes make too much sense to be followed. Let’s hope this is not the case and that Romney and all candidates can take this advice.

  14. Simon says:

    Good post Dr. Goodman.

  15. Charles Johnsen says:

    Only one observation: A republican democracy must have a vigorous debate. To me bipartisan means that, while Dems and Republicans are included in the deal, objective truth and libertarians are excluded. Bipartisan is the scariest word in American politics. When the two major parties agree the rest of us are screwed.

    When they fight they get less done. Over the last two hundred years that would have been, mostly, a good thing.

  16. Virginia says:

    I like the NCPA’s new speech-writing. I think this should be a regular installment.

    I doubt that Mitt will say any of those things (he’s too much of an entertainer, in my opinion), but you make some really great points.

  17. Chase Mansfield says:

    Mr. Goodman,

    Everyone in my office dislikes you. But i’m a big fan, keep it up.