The Most Important Health Care Story Of The Past 24 Hours Is...

(A): The American Medical Association endorses the House of Representatives' health care reform bill, which includes a "public option."

(B) The Congressional Budget Office director dares to speak truth to power: none of the major health care bills will reduce costs in the short term and will add to the deficit in the near term.

I was going to pick (B), until I read (C) -- the subhead to a story about how Massachusetts is on the verge of abandoning the fee for service system -- the blood vessels, if you will, of modern American health care.

The subhead is this: "Hospitals and doctors may be put on budget."  This change, which was recommended by a commission of stakeholders including doctors and hospitals, is exactly the type of "delivery" reform that health economists are always touting. In essence, every insured person would receive an adjusted share of a predetermined amount of money that insurers and government programs will use to pay for their health expenses for a year. As the Boston Globe notes, "[p]roviders would have to work within a predetermined budget, forcing them to better coordinate patients' care, which could improve quality and reduce costs."  There are many details to work out, and the devil lurks: the "shares" must be adjusted for socioeconomic status, different types of treatments, chronic conditions and other factors. Doctors can't see their income disappear or dry up suddenly, or else the reforms would be untenable. The public can't perceive the new scheme as a form of rationing, although health care reform is inevitably a form of rationing. Under the state's universal health insurance scheme, which looks a bit like what Democrats are proposing for the country, everyone (sans certain categories of non-citizen immigrants) is required to hold or purchase health insurance, either through their employer or through a "connecter"-like exchange system. Costs have increased fairly dramatically, as was predicted.  By shifting to a system where outcomes determine payment more than services rendered, it might be possible to contain costs -- or at least to manage their growth. 

Presented by

Marc Ambinder is an Atlantic contributing editor. He is also a senior contributor at Defense One, a contributing editor at GQ, and a regular contributor at The Week.

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