Will the individual mandate reduce hospital productivity?

While some in the industry point to Massachusetts as proof of health reform's success, a new study shows that the state's universal insurance law resulted in a significant drop in hospital productivity.

Soon after the mandatory insurance began, overall productivity of Massachusetts hospitals fell 3.5 percent from 2005 levels, according to a study published in Health Care Management Review. Meanwhile, productivity jumped 4.1 percent among all hospitals across the country during that period.

Reform advocates claim increasing access to healthcare would improve population health, therefore decreasing the need for hospital services and less severe illness among hospitalized patients. However, the study suggests the universal coverage could release "pent-up demand" for expensive, elective hospital services.

"Based on the Massachusetts experience, legislating mandatory health insurance coverage at the national level is likely to be accompanied by a near-term decrease in overall hospital productivity and a concomitant increase in overall healthcare costs," coauthor Mark A. Thompson of Texas Tech University said yesterday in a statement.

The study raises the question of whether hospitals nationwide will suffer from decreased productivity and associated costs once the individual mandate takes full effect.

But some states may not see major gains in coverage under health reform. Despite the U.S. Supreme Court ruling, the individual mandate is facing strong resistance from politicians and residents in Oklahoma, for instance, The Washington Post reported. With one of the highest rates in the country, about one in five Oklahomans lacks health insurance.

For more:
- here's the study abstract
- check out the research announcement
- reach the Post article

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