The Fight Over How Deeply To Cut Health Care Costs

A behind the scenes fight about what goal Massachusetts should set for cutting health care costs burst into the open tonight. The Greater Boston Interfaith Organization (GBIO) and the state’s largest employer group, Associated Industries of Massachusetts (AIM) are both calling for a target that would mean deep cuts.

Although health care spending has been growing at least twice as fast as the rest of the state’s economy, these groups say the state must hold health care spending to two points below the state’s gross state product (GSP). OK, this is wonky, but you’re going to hear a lot about health care and GSP in the coming months, so let’s plunge in. GSP-2 would be a big change. It would mean spending tens of billions less by 2020.

Prepared by Diana Eastman, Research Associate, Harvard School of Public Health

GBIO president Rev. Burns Stanfield says, “Our state must take strong action to reverse the trend of the growth of health care costs and provide incentives to create a health care system that rewards quality not quantity; health care not sick care.”

In a blog post tonight, AIM president and CEO Rick Lord says, “the math is pretty simple.” If one third of all health care spending is waste (care that doesn’t make us better), then “the process of keeping health care cost growth below economic growth seems reasonable.”

The Massachusetts Hospital Association says GSP -2 is a dangerous goal that would disrupt health care in the state and force some hospitals to close.

We’ll have more reaction on Wednesday to the proposals from GBIO and AIM.

In the meantime, here’s some additional data from Diana Eastman, a research associate at the Harvard School of Public Health, that shows the dollar differences between various goals.

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