Health care economic changes on the horizon

By Edward Stern J.D.
April 1st, 2017

An interesting circumstance is happening in health care.

The government, including state and federal entities and private enterprises are both funding health care and providing health care. The funding and provision of health care are two entirely separate issues and, although inter-related, should not be confused with each other.

As the federal government appears to be planning to reduce its economic footprint in health care, the states may need to make economic choices regarding who will provide particular services in their states.

Mental health crisis teams in Massachusetts are now fully served by private vendors. In a process that began in the 1980’s, Massachusetts is completely served in this area of mental health when Cape Cod and southeastern Massachusetts areas switched their services into the crisis system.

The headlines announcing the switch cited $7 million in savings. (See report of State Auditor’s Office as reported in the Cape Cod Times, March 31, 2016).

Perhaps the savings alone would and should justify the result here. Is money the equivalent of efficiency? What else might be included in an evaluation of providing services to the public?

Over the past century, there have been a number of times when states and municipalities have switched from public services to private services and sometimes back again. Trash collection and prison maintenance are examples.

However, there may not be sufficient reasons to draw parallels with these services and public health, particularly of mental health services.

Are dollars “in” and dollars “out” the most important factor in this analysis? It is important to think in terms of dollars “in” and “out” rather than only expenditures because sources of money going into the system can be public or private funds and money going out can return to the state as taxes or rent or return to the private sector for salaries and other services (“non-profit” institutions) or profit (“for-profit” institutions).

Massachusetts seems to be presently using “non-profit” under contract programs for these mental health services.

What else could be measured in the public health/mental health field that could be helpful in evaluating the new system? Even with a list of possible factors like those listed in an NIH article below, it may still be difficult to find ways to measure these issues.

1) The first criteria may be accessibility. Where would these services be? Where would the services be as compared to the general population? Where would these services be compared to who actually uses the services? These factors would be important for purposes of possible delay on the timing of responsiveness.

2) Quality of care is probably the most difficult factor to measure. Is this factor measured by number of patients versus staff or by the amount resources versus outcomes? Would quality of care depend on potential, available care or on someone’s expectations of acceptable care? Should quality of care be based on a “minimum” standard, an “average” standard or the “best care” available?

Issues of equity and equality cloud some of these issues. With public sector money, there is a tension between what someone needs and what someone might expect is due for a particular person’s needs.

Of special note is that from state to state and sometimes county to county, or city to city, the conditions are so different that the answers to these questions will be quite different, even with similar funding sources.

So even if Massachusetts determines that the savings and outcomes are both justified and acceptable, other states might determine that a different system or hybrid system suit their purposes better.

3) When studying diseases, patient outcomes are often measured. In the case of mental health what are the outcomes: the result of a particular episode, the length of stay for the particular episode, the long-term follow-up or some other factors. Is there a way to measure these results if more than one agency is involved?

With a new system, there is an opportunity to run studies to look at many of the questions raised here. It would not be surprising if in 20 or 30 years, the opinions supporting the providing of services changed.

Edward M. Stern, J.D., has a private law practice in Newtonville, Mass., Stern serves as assistant dean for pre-law advising at Boston University and is a visiting lecturer for the University of Massachusetts/Boston Department of Sociology.


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