Thursday, August 23, 2012
Canute the Great and Controlling the Cost of Health Care
About a thousand years ago, Canute the Great, a Dane, was
King of England and a big chunk of Scandinavia . Legend has it that one day he set his throne by the sea shore and commanded the
tide to halt and not wet his feet and robes.
I am reminded of
that by the recent enactment of another piece of health reform legislation by
the Commonwealth
of Massachusetts , this
time focused on cost control. Though I
haven’t read the 300-page bill, I conclude from the article about it in the
August 1 issue of the Boston Globe that the approach being taken is not that
much different from that of Canute and the tide. The Massachusetts
government is declaring that health care costs will not rise more rapidly than
the growth of the economy as a whole. It
then admonishes providers to conform to the limit and sets up new government
agencies to watch them as they try.
Much faith seems
to be placed in the conversion of the payment system from fee-for-service to
HMO-style capitation (euphemistically referred to as global payment). The law requires Medicaid and state employee
plans to convert, but only urges private insurance to do so. Commentators doubted that the private sector
would rush to comply.
According to
reports, the tide did not respond to Canute’s command. We’ll see if health care providers in Massachusetts are any
different.