In a fascinating profile of Mitt Romney as Bain Capital
businessman, Benjamin Wallace-Wells explains the shorthand version
on why
Romney tackled health care as Massachusetts governor:
Stemberg served then (as now) on the president’s council of
Massachusetts General Hospital, and he remembered a conversation
he’d had with a doctor named Peter Slavin, who has been the chief
executive of that hospital system for most of the last decade.
“[Slavin] mentioned this huge problem,” Stemberg told me, “which is
all these uninsured people clog the ER.” The hospital had to treat
them. “There was a law that said that all the insurance companies
had to fund the free care. That system made absolutely no sense.
“It was, as Stemberg told Romney, “the least efficient way to serve
them.”
And thus Romneycare was born, sold in large part as a way to
combat the free-rider problem. It was either a misdiagnosis of the
problems underlying the health care system or it was purposefully a
state-level workaround of a problem-causing federal regulation, the
Emergency Medical Treatment and Active Labor Act (EMTALA). Avik Roy
explains how EMTALA creates and exacerbates free-rider problems
in hospitals.
EMTALA requires that hospitals provide emergency care to anyone
who needs it, regardless of citizenship, legal status (i.e. illegal
immigrants), or ability to pay. Technically speaking, EMTALA only
requires this of hospitals that accept Medicare and Medicaid
insurance. But since Medicare and Medicaid represent more than half
of all health expenditures in the United States, very few hospitals
are equipped to function without government funding, and therefore,
nearly every hospital in the United States is covered by
EMTALA.
EMTALA is, indeed, the central factor in the “free-rider”
phenomenon. The government forces hospitals to care for these
individuals, without financially compensating hospitals for the
cost of doing so. It is one of the largest and most coercive
unfunded mandates in the United States.
There’s only one problem with Romney’s continued defense of
Romneycare: it hasn’t worked. As Sally Pipes points out, emergency
room visits increased by 9 percent in the years following
Romneycare’s passage. And the Heritage Foundation’s Bob Moffitt, a
longtime supporter of the Massachusetts health law, has
admitted that the mandate approach has not worked:
Yes, in the early 1990s, we, along with other prominent
conservative economists, supported the idea of such a mandate. It
seemed the only way to solve the “free-rider” problem, in which
individuals can, under federal law, walk into any hospital
emergency room nationwide and rack up big bills at taxpayer
expense.
Our research in the ensuing two decades has led us to realize
our initial idea was operationally ineffective and legally
defective.
It’s understandable that Romney has striven to defend his
Massachusetts plan. It was his signature achievement as Governor,
and to renege would be to give up what he has built in the media as
a major accomplishment. But in grassroots conservative circles,
Romney’s devotion to his Massachusetts health care law is an
unacceptable original sin.
