Mandates?

David Frum wonders whether the Supreme Court's striking down of Obamacare's mandates might lead to a bigger---not a smaller---government role in health-care:

We are headed, it would seem, to a post-mandate future that looks something like this:

Medicare will provide fairly generous government health coverage to about one-quarter of the population.

Medicaid will provide much less generous government coverage to one-quarter of the population.

The population outside Medicaid and Medicare will subdivide into two main groups:

The affluent and those whose labor is greatly valuable to their employers will be covered by an ever-more-expensive and ever-shrinking private-insurance market.

The people who can't pay themselves and whose employers won't pay for them will drop out of the private market, and either look for ways to qualify for Medicaid or wait and pray until they qualify for Medicare.

Political pressures will induce politicians to open Medicaid to more and more uninsured people. Fiscal pressures will force politicians to make Medicare less generous and more Medicaid-like.

 Meanwhile, Mickey Kaus (an Obamacare defender) looks into limiting principles for a health-insurance mandate.

Federal Data: Health Insurance Premium Growth Has Slowed After Romneycare

In 2010, John F. Cogan, R. Glenn Hubbard, and Daniel P. Kessler published in Forum for Health Economics & Policy a report (“The Effect of Massachusetts’ Health Reform on Employer-Sponsored Insurance Premiums”) on the effects of Governor Mitt Romney's 2006 health-care reform in Massachusetts.  This report suggested that, up until 2008, these reforms (hereafter referred to as "Romneycare") led to a relative increase in health-insurance premiums.  This report was cited numerous times by opponents of Romney and helped fuel the belief that Romneycare caused health-insurance premiums to skyrocket in Massachusetts (even though Cogan et al. did not make this claim).

However, new data has now come out (covering through 2010), and this data tells a rather different story.  It instead suggests that Massachusetts's health-insurance premium growth declined relative to the nation as a whole in the years since Romneycare has been enacted.  From 2006 to 2010, employer-sponsored health-care premiums for a family rose about 19% in Massachusetts, while they rose about 22% in the US as a whole.  Compare that to the period between 2002 and 2006, when Bay State family premiums increased 40% and US family premiums rose only 34.5%.  Family premiums have seen the greatest reduction in growth since Romneycare; individual premiums have also slowed their rate of growth, though by not as much.  For both family and individual premiums, the rate of growth fell below the national average in the period between 2008 and 2010.

The analysis below will look at the growth of employer-sponsored health-insurance premiums for families and for individuals prior to 2006 and after 2006.  It will also look at the difference in growth rates for health-insurance premiums for businesses in the small group market (those with under 50 employees) and with businesses with more than 50 employees.  The numbers shown are average premiums for families and individuals.  I use the same source as the Cogan study mentioned above, the federally sponsored Medical Expenditure Panel Survey.  (I also borrow some of my methodology from the Cogan study as well.)

Looking at employer-sponsored health-insurance premiums is a helpful lens for looking at the effects of Romneycare on the insurance market.  According to the Bureau of Labor Statistics and the Census Bureau, 69% of Massachusetts residents under 65 were covered by employment-based health insurance in 2010.  Nationally, a little over 58% of US residents under 65 were covered by employment-based insurance.  So a significant portion of the Massachusetts insurance market is connected to employment.

I.  Family Premiums v. Individual Premiums in Massachusetts

The following tables show the percentage growth in average family and individual premiums for the United States as a whole and Massachusetts during two periods: 2006 to 2010 (the four years after Romneycare) and 2002 to 2006 (the four years before it).  Looking at the years prior to Romneycare's passage will give some sense of the overall growth rate of Massachusetts premiums before reform was enacted.  Situating Massachusetts's growth numbers in the greater context of time and national trends will help evaluate the arc of the state's premium growth after Romneycare.  For each period, I give the raw difference in percentage growth between Massachusetts premiums and those of the nation as a whole.  A positive difference means that Massachusetts premiums are growing more quickly than those of the nation as a whole; a negative difference means that they are growing more slowly.

These charts also provide a raw differential for the differences between those two periods (arrived at by subtracting the 2010-2006 difference from the 2006-2002 difference).  Under the circumstances explored in the present analysis, a positive differential suggests that Massachusetts premiums after the passage of Romneycare curved even more upwards relative to the nation as a whole; a negative differential suggests that, after the Massachusetts health-care reform, the rate of premium growth slowed relative to the nation as a whole.

A. Average Family Premiums
	2006-2010	2002-2006
US Premium % Growth	21.9%	34.5%
MA Premium % Growth	18.8%	40.0%
Difference in Growth (MA-US)	-3.1%	5.5%
MA/US Differential 06-10 v 02-06	-8.6%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.D1, 2002-2010

B.  Average Individual Premiums
	2006-2010	2002-2006
US Premium % Growth	20.0%	29.1%
MA Premium % Growth	21.7%	32.7%
Difference in Growth (MA-US)	1.7%	3.6%
MA/US Differential 06-10 v 02-06	-1.9%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.C1, 2002-2010

Looking at the raw differences and differentials does not entirely reveal the precise magnitude of the change in premium increases for Massachusetts, so here's another chart showing the percentage premium increase in Massachusetts as a percentage of the US percentage premium increase.  The US percentage increase is equal to 100%.  So, for the 2002-2006 period, family premiums in Massachusetts grew 40%, while they grew 34.5% in the US; this would be represented as 116% in the chart below, as 40% is 116% of 34.5%.

C.  Premium growth compared to US Growth (US Growth =100%)
	2002-2006	2006-10
MA Family Premiums	116.0%	85.8%
Ma Individual Premium	112.1%	108.7%

This data suggests that family plans in the Bay State have witnessed the largest decline in growth.  Situating Massachusetts within a broader, state-to-state context makes this decline in premium growth even more striking.  By 2010, Massachusetts had the third-lowest average family premiums in New England (Vermont had the lowest, and Maine's family premium was $30 less than Massachusetts's) and had lower average family premiums than a number of other states in other regions, including New York, Illinois, Delaware, and Florida.  Often held up as an example of a successful "red state" model on health-care as well as other issues, Texas has been less successful at slowing the growth of premiums than Massachusetts.  The gap between these two states has shrunk since Romneycare has been enacted.  The average family premium in Massachusetts was about $600 more than the average family premium in Texas in 2006 ($12,290 vs. $11,690).  In 2010, the difference between average family premiums had declined to less than $100 ($14,606 vs. $14,526).

Health-insurance premium growth did not slow as much for individuals as it did for family plans.  However, it still did slow in absolute terms and relative to the nation as a whole.  By the the 2008-2010 period, the individual premium in Massachusetts grew about 5% slower than it did for the US (Bay State premiums grew 11.9% while US premiums grew 12.6%), so the gap between the two premium growth rates did narrow over the period.

It is also perhaps worth comparing not the magnitude of health-insurance premium growth but the size of premiums themselves for the US and Massachusetts.  Below are two charts comparing US and Massachusetts average premiums for family and individual employer-sponsored health insurance plans.  Listed is the average Massachusetts premium, the average US premium, and the Massachusetts premium as a percentage of the US premium (a percentage over 100% means that the Massachusetts premium is larger than the US premium).

D.  Average Family Premiums (in US $)
	US	MA	MA as % of US
2010	13871	14606	105.3%
2009	13027	14723	113%
2008	12298	13788	112.1%
2006	11381	12290	108%
2005	10728	11435	106.6%
2004	10006	10559	105.5%
2003	9249	9867	106.7%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.D1, 2002-2010

E.  Average Individual Premiums (in US $)
	US	MA	MA as % of US
2010	4940	5413	109.6%
2009	4669	5268	112.8%
2008	4386	4836	110.3%
2006	4118	4448	108%
2005	3991	4235	106.1%
2004	3705	4141	111.8%
2003	3481	3496	100.4%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.C1, 2002-2010

In 2010, the average family premium in Massachusetts was closer to the national average after the passage of Romneycare than it was the year Romneycare was enacted.  Indeed, the average family premium actually declined in Massachusetts from 2009 to 2010.  The average individual premium grew a little bit relative to the nation as a whole from 2006 to 2010.  However, this premium had been relatively even larger in the past (in 2004, for example).  It will be interesting to see whether 2011 continued the downward trajectory in individual premium growth hinted at in 2010. 


II.  The Effects of Reform on Premiums for Small and Big Businesses in Massachusetts

The effects of Romney's reforms on small businesses remain a topic of considerable concern.  In order to explore these effects, I have taken a look at the rates of premium growth for companies with fewer than 50 employees (the small group market) and for companies with more than 50 employees.  The tables below, organized according to principles similar to those of the first two tables of this article, compare the growth rates for average health insurance premiums for small and big businesses in Massachusetts and the US.

F. Family Premiums--Small Businesses
	2006-2010	2002-2006
US Premium % Growth	18.7%	30.5%
MA Premium % Growth	23.2%	26.0%
Difference in Growth (MA-US)	4.5%	-4.5%
MA/US Differential 06-10 v 02-06	9.0%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.D1, 2002-2010

G.  Family Premiums--Businesses with over 50 Employees
	2006-2010	2002-2006
US Premium % Growth	22.4%	35.2%
MA Premium % Growth	17.8%	43.1%
Difference in Growth (MA-US)	-4.6%	7.9%
MA/US Differential 06-10 v 02-06	-12.50%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.D1, 2002-2010

H.  Individual Premiums--Small Businesses
	2006-2010	2002-2006
US Premium % Growth	16.3%	26.2%
MA Premium % Growth	14.7%	32.6%
Difference in Growth (MA-US)	-1.6%	6.4%
MA/US Differential 06-10 v 02-06	-8.00%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.C1, 2002-2010

I.  Individual Premiums--Businesses with over 50 Employees
	2006-2010	2002-2006
US Premium % Growth	21.0%	30.1%
MA Premium % Growth	23.4%	33.1%
Difference in Growth (MA-US)	2.4%	3.0%
MA/US Differential 06-10 v 02-06	-0.60%
Source: Medical Expenditure Panel Survey, Insurance Component Table II.C1, 2002-2010

There is an interesting difference in the growth rates of individual and family premiums for businesses with fewer than 50 employees and for those with more than 50 employees.  For businesses with fewer than 50 employees, family premiums have increased at a faster rate relative to the nation as a whole since the passage of Romneycare, but single premiums have increased at a slower rate relative to the national average.  Something like the converse occurs for businesses with more than 50 employees: family premium growth has declined relative to the nation as a whole, and single rate increases have correspondingly slowed compared to the nation as a whole but not as much as small-business single employee rates did.  These numbers complicate any attempt to weigh the effects of Romneycare on small businesses insurance premiums.



III.  2010 Rate Dispute: Potential Implications
There is a potential fly in the ointment of this analysis: in April 2010, the state insurance commissioner vetoed numerous rate increases for the small-group market proposed by a number of major Massachusetts health-insurance plans.  At first, the insurance companies sued to overrule this action.  Then various insurers settled with the Commonwealth to put some rate increases in place.  This legal difficulty does not, however, seem to fully explain why the average family premium actually declined in 2010; since rate hikes were approved, the average premium could easily have risen.

Furthermore, the family small group market witnessed some of the biggest rate increases in the years 2006-2010, so a decline in average premium growth was due to declining growth for premiums for larger employers (i.e., those employers mostly immune to the commissioner's ruling), which suggests that we should not overestimate the effects of this ruling on health-care premiums.  Between 2006 and 2010, the family premium for small group employers in Massachusetts increased faster than it did for the nation as a whole, rising 23.2% while US premiums grew 18.7%.  For employers with over 50 workers, health insurance premiums for a family plan grew slower than they did for US, increasing 17.8% while the national average climbed 22.4%.  Furthermore small group family rates grew 6.5% in 2010 even as larger employer rates shrunk 2.6%.  This dispute may have had some effect on the rate of insurance premiums growth, but it should not be overestimated.

Moreover, many health-insurance groups posted considerable surpluses in Massachusetts in 2010 (Massachusetts health insurance is dominated by non-profits, so "surpluses" are often used instead of "profits").  Three of the four biggest health insurers in Massachusetts (Harvard Pilgrim, Blue Cross/Blue Shield, and Tufts) had surpluses in 2010.  The major Massachusetts-based insurer which lost money (Fallon Community Health Plan) had a smaller loss in 2010 than it did in 2009; in fact, 2009 was a worse year for Massachusetts insurer finances than 2010 was.  So it is hard to say that the rate dispute pushed these plans to the brink of bankruptcy.  For at least the first half of 2011, health insurance companies in Massachusetts were also posting big surpluses, in part because of slowing health-care costs.



IV.  Conclusions and Comments
Obviously, the picture painted by this data is partial.  Health-care costs paid by the consumer are not limited to health insurance premiums.  However, it is perhaps worth noting that, in 2010, various other medical fees in Massachusetts (such as copays for visits to the doctor, deductibles, and coinsurance rates payable by consumers) were lower in Massachusetts than in the nation as a whole.  Moreover, it would also be worthwhile to compare the per capita GDP of Massachusetts residents to health-insurance premiums.  The Bay State has a relatively high per capita GDP, so it would be interesting to explore the change in premiums as a percentage of personal income over time.  Taking into account these details may find a further reduction in health-care cost growth in Massachusetts compared to the US.  As an additional point, looking at average premiums does not tell the whole story of premium growth in a state: looking at the growth of premiums at the low, middle, and high ends of health insurance plans would further reveal some of the implications of Romneycare for health insurance premiums.

This study is more an exercise in correlation rather than causation: it has not conclusively proved that Romneycare caused health-care premiums to slow their rate of growth in Massachusetts.  But it does trouble the common claim that Romneycare uniquely caused premiums to skyrocket in Massachusetts.  Instead, the four-year period after the passage of Romneycare witnessed slower growth than the four-year period before it---both in absolute terms and compared to the nation as a whole.  In the period after 2006, premium growth for families fell below the growth rate for the national average, and the growth rate for individual premiums grew closer to the national average's growth rate.  By the 2008-2010 period, both growth rates fell below the national average.  This trend may not continue, but that is the current trend.

One of the premises of Romneycare was that universal insurance through government mandates and insurance subsidies to the poor would lead to slower growth rates in medical spending and insurance premiums.  The spending growth rate on medical care seems to have declined in Massachusetts, and premium growth has either stayed the same or fallen relative to the national average.  These trends alone do not make Romneycare a success, but they also suggest that health-insurance premium increases may not be a sufficient cause for declaring it a failure.

MA Think Tank: Romneycare Added Less Than 1% to State Budget

Forbes has an interesting story up that includes an interview with Michael Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation.  Widmer says that Romneycare added about $100 million to the state budget:

To pay for extra coverage, however, the state had to find an additional $350 million from its own budget. On balance, RomneyCare costs Massachusetts an extra $100 million a year from its state budget. “Not bad for a state with a $30 billion budget,” Widmer said. 

So, based on this analysis, Romneycare added 0.3% to the state budget----that's hardly a budget-buster.

Combining those numbers with the possibility that Romneycare may have actually slowed the rate of health-care spending growth in Massachusetts, one might suggest that more research into the effects of the law may be warranted.

Clarifying the Curve

In a comment at FrumForum, Chris Conover at AEI replies to my analysis of the rate of growth of per capita health-care spending in Massachusetts.  Since Conover raises some worthwhile points and because FrumForum is (alas) about to go dark, it's worth quoting the comment in full:

As a practical matter, it is quite difficult to distinguish the effects of the recession from the effects of “Romneycare” in the 2007-2009 period. So in general, Fred Bauer gives more credit to Romneycare than I myself would.
That said, in assessing gubernatorial performance, it seems a little odd to ignore the fact that health spending was going up MUCH faster than the national average while Governor Romney was in office but then give him great credit for the purported slowdown in spending after he left office. If the argument is that governors really can’t do that much about health spending anyway, then it renders all these cross-state comparisons moot. One can’t (or shouldn’t) cherry-pick the data to highlight a comparison that looks favorable and ignore ones that are not.
The best analogy I can give is this. Imagine someone who is very obese getting a diet pill. Prior to taking the pill, this individual’s weight relative to the national average was rising 27% every 2 years. After the pill, their weight is still rising relative to the national average, but “only” 5% faster. The individual taking the diet pill is still gaining weight faster than those who don’t. Would you take that pill?
Until Mr. Bauer can explain what it is about Massachusetts health care that should lead us to “expect” 27% faster-than-average growth in its spending, pointing to only 5% faster-than-average growth seems problematic. Especially since the one thing we know for certain happened between 2004-2006 and 2007-2009: Governor Romney left office! If we give Governor Romney “credit” for the ballooning of MA health spending during his administration, then his apparent ability to lower this excess to “only” 5% seems far less impressive.

There's a lot here, so I'll address it in parts.

First of all, I should clarify that the aim of my last piece was not---FrumForum headline notwithstanding (and I was not responsible for writing the headline for the FF post)---that Romneycare alone bent the spending curve down forever.  I think more analysis and evidence would be needed to substantiate that argument.

Instead, my analysis grew out of a desire to test the now-standard claim that Romneycare exploded health-care spending in Massachusetts.  This federal data suggests that, at least until 2009, this claim might be more than a little problematic.  Now, more evidence might come out that supports the argument of exploding Massachusetts health-care spending due to Romneycare, but current federal data does not support this claim.

In his last few posts to the AEI blog, Chris Conover has been making a very different claim: that health-care spending grew rather quickly during Romney's term as governor.  The CMS data certainly seems to support that claim.  For example, in 2006, health-care spending grew 44% faster in Massachusetts than it did in the nation as a whole.  However, Romney is not exactly an anomaly here.  In 1998, during Paul Cellucci's term, health-care spending also grew 44% faster in Massachusetts than it did in the nation as a whole.  Since 1991, there have been only three years---1995, 1996, and 1999---where health-care spending in Massachusetts grew slower than it did in the nation as a whole. It's also worth noting that my piece was not particularly talking about Romney's overall record of health-care spending but about the effects of Romneycare (or at least what the effects of it aren't).  So I'm not sure how much I was "cherry-picking" data here as much as trying to compare the immediate period before Romneycare to the period after Romneycare.

Also, the extreme increase in spending during Romney's tenure arguably makes the case for Romneycare stronger, not weaker: an executive looking at exploding spending might feel the need for a game-changing reform.  Moreover, most anti-Romney "conservatives" are not claiming that health-care spending in Massachusetts during Romney's tenure was much of a problem; for them, Romneycare's meddling with the status quo was worse than leaving things as they were.

As I said in my earlier post, I think health-care spending is due to a variety of factors, some of which are out of the hands of governors and government more broadly.  So I think there are limits to how much any single political official can change the health-care curve, especially in the US health-care system, which relies on a combination of government and private spending.  I also think that cost controls are not the be-all and end-all of measuring the worth of a health-care system.

However, if I were to defend the claim that Romneycare reduced the rate of health-care spending growth, I might make the following points.  Mr. Conover is right to note that the recession does play a role in the reduction of the rate of health-care spending growth in the US and Massachusetts.  However, much more analysis would need to be done to explain why the recession caused the rate of growth in per capita health-care spending to decline in Massachusetts faster than it did in many other states, including ones with higher unemployment rates.

The recession might explain the absolute fall in the rate of per capita health-care spending growth in Massachusetts, but it does not entirely explain the relative fall as well.  In the recession during the early 2000s, Massachusetts was hit fairly hard (its unemployment rate more than doubled between late 2000 and the middle of 2003), but its health-care spending grew at a much more rapid rate than that of the nation as a whole: 14.7% faster in 2001, 20.5% faster in 2002, and 9.7% faster in 2003.  So, in the past, an economic slow-down did not lead to a radical narrowing of the gap between US and Massachusetts health-care spending growth rates.

And to return to Mr. Conover's analogy of the pill:

Prior to taking the pill, this individual’s weight relative to the national average was rising 27% every 2 years. After the pill, their weight is still rising relative to the national average, but “only” 5% faster. The individual taking the diet pill is still gaining weight faster than those who don’t. Would you take that pill?

 I think I, and most other people, would take that pill (with a couple caveats on the side).*  After all, that is still a big reduction in the rate of growth.  But I wouldn't stop looking for further treatment, either.  Refusing to take that pill (when that pill can be taken as part of a broader health-care regime) would be somewhat like letting the perfect be the enemy of the good.

And more data here will be crucial in adjudicating this point.  In 2007, per capita health-care spending in Massachusetts grew 46% faster than it did for the nation as a whole, but, in 2008 (once Romneycare went more fully into effect), it grew 6.7% faster; by 2009, it was only growing 3.8% faster.  That could either be a statistical blip or it could be the start of a downward trend in the growth of health-care spending in Massachusetts; there have been times when the rate of growth in Massachusetts spending has slowed compared to the nation as a whole only to explode a few years later, so a couple years is not enough time to demonstrate sufficiently the effects of a health-care policy on spending.

But I think there is a big difference (in terms of policy and in terms of politics) between debating how much Romneycare slowed spending up through 2009 versus debating how much it skyrocketed spending up through 2009.  Contemporary political discussion has focused on the latter; federal data suggests that this assumption might be a problematic one.

*Those caveats include a consideration of whether the pill would have other harmful side effects and whether it would work over the long term.  The jury is probably still out on Romneycare on both those points.  I do not think---and doubt even Romney himself believes---that Romneycare is the magic pill for curing all the nation's health-care concerns.

Bending the Curve?

Via an interesting post by Chris Conover, I came across this recently released National Health Expenditure report, which has data on health-care spending up through 2009.  This data includes a state-by-state breakdown of personal health-care spending (a number that includes direct expenditures on health-care but does not include administrative costs).

Digging into these numbers allows one to calculate (roughly) the growth of health-care spending in each state from 1991 to 2007.  This data set tells an interesting story for Massachusetts after the passage of health-care reform there: after the passage of Romney's reforms, the rate of per capita health-care spending growth slowed in Massachusetts both in absolute terms and relative to the national average.

Here's a chart I put together looking at the cumulative growth over two periods: from 2004 to 2006 (prior to Romneycare) and from 2007 to 2009 (after the measure was applied).  I've included the US national average as a whole as well as the New England average in order to situate Massachusetts in its local context.  New Hampshire offers the example of a New England state which did not engage in Romney-style reforms, and Ohio offers a counterexample of a Midwestern state with relatively slower-growing health-care costs.  Texas, often touted as an alternative model for the nation, also helpfully sets up a contrast with Massachusetts.  This chart looks at the cumulative percentage change in per capita personal health-care spending over the 2004-2006 and 2007-2009 periods.

	Spending Growth 2004-2006	Spending Growth 2007-2009
US National Avg	11.40%	7.86%
New England	9.23%	9.15%
MA	14.51%	8.28%
NH	16.69%	10.10%
NY	10.55%	8.02%
OH	9.56%	7.89%
TX	12.14%	9.05%

Perhaps in part due to the recession, the rate of growth for health-care spending dropped for the nation as a whole (though spending did still grow).  However, it's worth noting that, in the years after Romney's reforms went into effect, the rate of growth for health-care spending in Massachusetts dropped even faster than the national average did.  Between 2004 and 2006, health-care spending in Massachusetts grew almost 27% faster than it did for the nation as a whole; between 2007 and 2009, it grew only 5% faster.  After Romney's reforms, Massachusetts went from having a health-care spending growth rate well above the national average to one just a little bit above.  For example, between 2008 and 2009, personal health-care spending increased at a rate of 3.8% in the US, while Massachusetts saw its spending increase by 3.9%.  Compare that to the changes between 2005 and 2006: US spending grew at 5.3%, but Massachusetts spending grew at 7.6%.  Situating Massachusetts in the context of the rest of New England makes the change in spending rates even starker: prior to Romney's reforms, Massachusetts personal health-care spending grew faster than the New England average most years.  After his reforms, it grew slower than the New England average (often having one of the lowest rates of health-care spending growth in the region).  These numbers suggest that Texas is doing a worse job at taming the rate of health-care spending growth than Massachusetts (though, for the moment, per capita health-care spending in Texas is lower than that of Massachusetts).

Massachusetts seems to have especially slowed down the rate of growth in hospital spending.  Between 2004 and 2006, Massachusetts hospital spending jumped 16.5%; between 2007 and 2009, it only climbed 5.5% (a 67% reduction in the rate of growth).  US spending on hospital care grew 12.7% between 2004 and 2006; between 2007 and 2009, it grew 8.6% (a 33% reduction in the rate of growth).  Spending in Massachusetts hospitals rose much more slowly than the national average.  One of the key premises of Romneycare was that bringing all of the commonwealth into the health-care system would lower the need of hospital use (especially the use of emergency room care) and thereby lower spending at the hospital level.  These numbers seem to suggest that something like that may be happening.

In many areas of health-care spending, the rate of growth for spending in Massachusetts either fell more than it did for the nation as a whole or fell at roughly the same rate.  This data would seem to muddy the waters for the claim that Romney's reforms caused health-care spending in Massachusetts to skyrocket.  Since Romneycare, health-care spending in Massachusetts (at least until 2009) grew more slowly than it did in many other states and also grew much more slowly compared to the rate of spending growth in Massachusetts before Romneycare took effect.

Health-care spending depends upon a variety of factors (including population aging and economic growth), so this data set does not tell the whole story regarding the effect of the 2006 reforms on health-care spending.  It does, however, pose a challenge to the argument that Romney's reforms uniquely inflated health-care spending in Massachusetts.  In terms of raw health-care spending, Massachusetts seems to have bent slightly down the curve of growth---compared to many other states and, in many respects, the nation as a whole.

(Of course, the rate of growth in health-care spending is not the sole deciding issue for Romneycare: other questions about long-term sustainability, the role of government coercion and spending, and other topics are also very important.  Nor is there a direct correlation between health-care spending and private insurance premiums, which seem to have increased in recent years.  Moreover, data for years after 2009 might tell a more complicated story.)

(Crossposted at FrumForum)

UPDATE: See this post for more on health-care spending in Massachusetts.

Romney Agonistes

It's perhaps hard not to feel some sympathy for the situation Mitt Romney has found himself in. By the close of the 2008 Republican primary, he was seen as the standard-bearer of conservatism, picking up the support of the likes of Ann Coulter and Jim DeMint. Yet now, he finds himself attacked as a lefty RINO and utter traitor to the conservative cause---for Romneycare, a measure he backed in 2006. Romney's record as governor did not change from 2008 to 2011 (he stopped being governor in 2007), but the perception of the conservative commentariat has. Notoriously derided as a flip-flopper, Romney has now found that some in the right-leaning punditocracy have flip-flopped on him. And these attacks on Romney emphasize not merely how the partisan optics have changed since 2008, which they have, but often criticize his politics on a much deeper, ideological level.

The Massachusetts health-care law has become an albatross around the neck of the man who could maybe almost be the Republican front-runner. The passage of Obamacare made health-care reform a central litmus-test issue for grassroots conservatives. The fact that the Obama White House boasts of similarities between Romney's reforms and Obamacare is not going to endear Republicans to Romney.

From the perspective of free-market conservatism, the reforms Romney sponsored have not been a resounding success. The rate of health-care uninsurance in the Bay State has dropped significantly, which is good (over 98% of the Commonwealth has health insurance). Wait times have potentially increased a little, though trends for longer delays for receiving care were in place before Romneycare passed. But costs are exploding. Romney's Democratic successor, Deval Patrick, is now looking to create a regulatory infrastructure to control insurance rates (and thereby doctor pay) as a way of coping with these skyrocketing bills. With unchecked Democratic power in Massachusetts, further state control of health-care delivery may be only just around the corner. Unless further reforms are made, Romney's health-care reform may prove to be quite the shot in the arm for private health-care in Massachusetts: a lethal injection.

So Romney's big speech on Thursday may prove to be a necessary but also somewhat desperate gamble. Faced with the (perhaps unfair) public perception that he is an opportunist who will shift in whatever direction may benefit him the most, Romney seems to have decided that he cannot utterly repudiate the Massachusetts health-care law. The fact that he has spent so many years defending these reforms would give a repudiation now an especially high political price.

Either a total defense of Romneycare or a total repudiation of it could damage his image in the eyes of grassroots conservatives and potential swing voters. Successfully resolving the health-care issue could help scrape away some of the veneer of artificiality so many voters have doubts about while also burnishing his conservative bona fides. Here are some thoughts about what Romney might want to achieve politically in this address:

Make clear the distance from Obamacare: Romney may attack Obamacare as inefficient, destructive, problematic, and so forth, but he should particularly emphasize those features of it (such as the 50-state mandate) that differ from the Massachusetts reforms. Attacking Obamacare is bound to win applause from righties. But Romney's attacks will ring hollow if he has not posed enough plausible distance between his policies in Massachusetts and those of Obama.

Build on the strengths of Romneycare: There are some positive, free-market features of the Massachusetts health-care law, which the Heritage Foundation praised. Romney could tout those.

Show technical expertise: The ability to maneuver through complex bureaucracies will be key for any potential Republican administration. Romney has a wealth of experience in running large organizations and a considerable proficiency with the details of policy. His speech on Thursday can showcase those skills. This speech doesn't have to be---and probably shouldn't be---a total wonkfest, but a suggestion of Romney's wonky tendencies would play to his strengths as a credible, center-right technocrat.

Move the debate forward: This is perhaps the most important political objective for the speech. If Romneycare dominates his Republican primary narrative (including both his campaign and what is said about his campaign), Romney loses. Game over. In this speech, Romney needs to change the topic to present a forward-looking approach to federal health-care reform (which he looks likely to do). Romney knows that even the all-out repeal of Obamacare will not be enough for our nation's health-care system, which does need reform. Moreover, every serious Republican candidate is probably going to talk about repealing Obamacare. By focusing on a specific set of policies for a way forward, Romney can distinguish his candidacy from the rest of the pack. For his political survival, Romney must make this campaign about the future.

Moreover, the right does need creative ways of trying to reform the health-care system to make it more affordable and efficient. Such a tangled web of government/non-profit/for-profit institutions has been set up that any reform will have to be as careful as possible to avoid any drastic and unpleasant unintended consequences. By focusing on the future of health-care reform (both for the private market and for Medicare, Medicaid, and other government programs), Romney can keep the past from sucking all the air out of present debates.

This could be a pivotal speech for Romney. If Romney can prove his viability on the health-care issue, he could start to solidify a core of support. If he cannot resolve the public perception of his health-care policies, he may find himself limping along and find the path to the nomination that much harder. Moments of testing can make or break a candidacy, and this may be one such moment.