A huge failure in Massachusetts

Mitt Romney's presidential run is history, but it looks as if the taxpayers of Massachusetts will be paying for it for years to come. The former Governor had hoped to ride his grand state "universal" health-care reform of 2006 to the White House, but his state's residents are now having to live with what he and the state's Democratic Legislature passed. As the Boston press likes to say, it's "the new Big Dig."

The showpiece of RomneyCare was its individual mandate, a requirement that all Massachusetts residents obtain health insurance by July of last year or else pay penalties. The idea was that getting everyone into the insurance system would eliminate the "free-rider" problem of those who refuse to buy insurance but then go to emergency rooms when they're sick; thus costs would fall. "Will it work? I'm optimistic, but time will tell," Mr. Romney wrote in these pages in 2006.

Well, the returns are rolling in, and the critics look prescient. First, the plan isn't "universal" at all: About 350,000 more people are now insured in Massachusetts since the reform passed. Federal estimates put the prior number of uninsured at more than 657,000, so there was a reduction. But it was not secured through the market reforms that Governor Romney promised. Instead, Massachusetts also created a new state entitlement that is already trembling on the verge of bankruptcy inside of a year.

Some two-thirds of the growth in coverage owes to a low- or no-cost public insurance option. Called Commonwealth Care, it uses a sliding income scale to subsidize coverage for everyone under 300% of the federal poverty level, or about $63,000 for a family of four. Commonwealth Care also accounts for 60% of statewide growth in individual insurance over the last year, and the trend is expected to accelerate, perhaps double.

One lesson here is that while pledging "universal" coverage is easy, the harder problem is paying for it. This year's appropriation for Commonwealth Care was $472 million, but officials have asked for an add-on that will bring it to $625 million. For 2009, Governor Deval Patrick requested $869 million but has already conceded that even that huge figure is too low. Over the coming decade, the expected overruns float in as much as $4 billion over budget. It's too early to tell how much is new coverage or if state programs are displacing private insurance.

The "new Big Dig" moniker refers to the legendary cost overruns when Boston rebuilt its traffic system. Now state legislators are pushing new schemes to offset RomneyCare's runaway expenses, including reductions in state payments to doctors and hospitals, enlarged business penalties, an increase in the state tobacco tax, and more restrictions on drug companies and insurers.

Mr. Romney's fundamental mistake was focusing on making health insurance "universal" without first reforming the private insurance market. The "connector" that was supposed to link individuals to private insurance options has barely been used, as lower-income workers flood to the public option. Meanwhile, low-cost private insurers continue to avoid the state because it imposes multiple and costly mandates on all policies.

Hailed at first as a new national model, the Massachusetts nonmiracle ought to be a warning to Washington. Barack Obama and Hillary Clinton are both proposing versions of RomneyCare on a national scale, with similar promises that covering everyone under a government plan will reduce costs. Mr. Obama at least argues that more people would be covered were insurance more affordable. But his solution is Massachusetts on steroids - make insurance less expensive for policyholders by transferring the extra costs onto the government. Mrs. Clinton likes that but also wants the individual mandate, despite the mediocre results so far.

The real problem in health care is the way the tax code and third-party payment system distort incentives. That's where John McCain has been focusing his reform efforts - because that really does have the potential to reduce costs while covering more of the uninsured - and Republicans ought to follow his lead. In this respect paradoxically, we can be thankful that Massachusetts ignored the cost problems that doomed other recent liberal health insurance overhauls in California, Pennsylvania, Wisconsin and Illinois. The Bay State is showing everyone how not to reform health care.

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Australian public hospital tries to dodge blame for incompetent surgeon

The Alfred Hospital has absolved itself of legal responsibility for the botched surgery of disgraced surgeon Thomas Kossmann, despite a review finding that his work as the Melbourne hospital's head of trauma put lives at risk. Although patients were subjected to unnecessary and bungled operations, Bayside Health chief Jennifer Williams said yesterday she did not expect to pay compensation. "From the information I have about the nature of the complaints, I would not envisage an insurance claim, but that would be a matter for future consideration," she said.

About 20 patients have contacted the hospital expressing concerns about operations Dr Kossmann performed on them, and the hospital has written to about another dozen. Slater & Gordon lawyer Paula Shelton said the hospital appeared to have breached its duty of care to the patients, and she encouraged them to come forward to discuss potential claims. "There's very good authority to say the hospital is responsible for the behaviour of Dr Kossmann," she said.

But Ms Williams refused to accept any responsibility for the hospital employing Dr Kossmann or for his bungled surgery, although she admitted the Alfred did not check the exaggerated claims in his CV and relied on the Royal Australasian College of Surgeons' assurances about his competence.

Orthopedic surgeon Bob Dickens yesterday released the findings of a damning peer review into Dr Kossmann, which were first revealed in The Australian last month. Mr Dickens, who headed the review panel, found Dr Kossmann had exaggerated his experience on his CV, conducted risky and unnecessary surgery and rorted government insurance agencies, including the Transport Accident Commission. He called for a sweeping audit of the Alfred's audit procedures, as well as the billing of Dr Kossmann and all other Alfred trauma surgeons.

The review has sparked a row between the college of surgeons, which blamed the hospital for not detecting the professor's surgical failings, and the hospital, which accused the college.

Mr Dickens's panel investigated 24 cases involving Dr Kossmann and found problems with 13, including grave errors. "Lives were put at risk. There were examples of catastrophic bleeding where there was difficulty getting control of the bleeding," he said. He cited other examples where a poorly placed screw in a heart had to be removed in a second operation, and how Dr Kossmann caused a hemorrhage in one of the main arteries supplying the brain during another procedure.

He said no one died as a result of the bungles, but patients were exposed to unnecessary risks, including infections. He questioned the college's decision to allow Dr Kossmann to practise without sitting the examination for foreign doctors. But college vice-president Ian Dickinson said the college had not erred in exempting Dr Kossmann from the exam. He blamed the hospital for failing to detect the failings through its audit and peer-review processes, and accused Dr Kossmann's previous employers of providing "glowing assessments" of his work.

Dr Kossmann, who resigned from the Alfred last month but denies wrongdoing, branded the review a "witchhunt" and said the press conference was a "show trial".

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