Massachusetts Senator Patricia Jehlen's bill to reduce health care administrative costs addresses a serious problem, but ultimately is not the best way to achieve her desired end. Though Jehlen's bill identifies a key problem with the American health care system, we must consider the ramifications if its passes.
Clearly, rising health care costs are a huge problem. Individuals and insurers are spending more than ever. Jehlen's bill appropriately begins the discussion on this issue, but does not offer the best of possible solutions because of its overly restrictive measures.
By legislating a cap on a health care provider's administrative costs, the bill unintentionally limits the flexibility of these same companies to provide the best care.
The American health care industry has a clear profit motive. Companies want to squeeze every unnecessary dime from their expenses to please their shareholders and to provide money for further development.
Obviously, no company likes high administrative costs. Rising health care administrative costs aren't being ignored, but the solution is not as simple as a new law.
Americans face higher administrative health care costs because American companies conduct their research for new cures and treatments in the United States. This system provides skilled, high paying jobs to Massachusetts and elsewhere, but ultimately adds costs to the bottom line. While the bill is intended to reduce these costs, the potential consequences could possibly cost jobs and limit the development of future treatments.
Moreover, the bill confuses a management issue with a legislative issue. Businesses already have a vested interest in eliminating inefficiencies that exist in the system.
By employing proper management techniques and competent professionals, health care companies can work to reduce unnecessary costs. No new law will replace the need for effective management, no matter how well-intentioned.
Moreover, legislators should let technologies that reduce management inefficiencies catch up to the health care industry. By putting the legislative cart before the management horse, eager legislators may inadvertently overcorrect a problem that the natural state of the market may address in due time.
Recent strides to digitize health care records are an example of the efforts providers are making to increase efficiency. More steps along this path would be effective because they allow doctors and hospitals the chance to integrate new technology into their practice on their own terms.
And as more steps are taken, an entire industry will surely be ready and waiting with business solutions to increase health care efficiency and reduce wasteful spending. Private industry has a history of meeting needs faster than government.
Massachusetts has a tradition of leading the way with innovative policies. On issues from the minimum wage to same-sex marriage to universal health care coverage, Massachusetts has a record of progressive policy proposals. Jehlen's mandate is the beginning of a conversation on lowering health care costs, but should not be the final answer.
Above all else, the goal of any law and any health care provider should be to provide the best quality care at the lowest possible price. We're confident that as the discussion continues, the best solution for businesses, doctors and patients will emerge.
