Affordability is key

COST. COST. Cost. When people talk to me about healthcare, they talk to me about how much it costs, and they are right to do so. As healthcare costs rise at three or four times the rate of inflation, the capacity of those who already have healthcare coverage to keep it goes down and the price tag of covering additional individuals goes up.

Therefore, it's a tribute to the Senate and House leadership, their respective memberships, and to Governor Romney that Massachusetts is debating ways to increase healthcare coverage in the middle of a five-year run of sustained, significant healthcare cost inflation.

There are good reasons to be moving in this direction -- hundreds of millions of dollars in federal Medicaid funding are at risk if the state does nothing, and there are two questions on universal healthcare heading for the ballot in 2006. But in a high healthcare inflation environment, the proposals being discussed that will make healthcare more affordable and accountable need to survive the legislative process.

First, and most important of all, the work that's been done to make healthcare costs and healthcare quality more transparent -- at the provider and procedure level -- must be strengthened and/or maintained. The cost of many procedures in Massachusetts can vary by anywhere from 50 to 300 percent, depending on where they're performed, and our inability to spotlight these differences and act on them has a lot to do with why our healthcare costs are so high.

Common procedures, like MRIs, can vary in price by more than 100 percent for the same service, and our community hospitals can often perform the same service -- with the same level of quality -- for far less than our academic medical centers.

Moreover, Harvard Pilgrim has surveyed Massachusetts residents and physicians on this issue, and both groups want and will act on cost and quality data -- if it is made available to them in easy-to-understand formats. It is time for the Commonwealth to collect the information and make it available to the public.

Second, the final legislation must make it easier for individuals and people who work for small businesses to purchase healthcare coverage on a pre-tax basis. This would mean a 30 to 40 percent reduction in what these people currently pay to purchase coverage, using after-tax dollars.

Third, individuals and small groups need more affordable product options and reinsurance from the Commonwealth to sustain an affordable price. Again, all of the plans on the table offer some variation on these reform opportunities, and they need to be part of the final proposal.

There is much more to healthcare reform than these three items, but affordability will drive sustainability. Done right, these initiatives can play a major role in ensuring that this year's healthcare reform efforts can be sustained over time.

Charles D. Baker is president of Harvard Pilgrim Health Care.