The Massachusetts House released its plan for cutting health costs on Friday. The Senate is releasing its own plan today. And now begins the public “compare and contrast” period, the ingathering of input that could influence the final bill that the legislature is expected to pass this summer.
Let us commence. This just came in from the Greater Boston Interfaith Organization, which has been campaigning for lower health costs:
GBIO is grateful to the Senate for their inclusion of the public health prevention trust with much needed funding. We all know that prevention saves lives and dollars.
With respect to the the TME spending target, GBIO supports the House version of the legislation. We estimate that the House target saves employees and employers an additional $11-12 billion over ten years, compared to the Senate version. We will be urging the legislature to adopt the House’s version of a TME spending target.
Translation: The House plan proposes a somewhat tighter cap on overall health spending, saying it should grow at a slightly slower rate than the state economy. The Senate version allows health spending to grow at a rate equal to or slightly above the state economy’s.
In contrast, Liz Kowalczyk’s extremely excellent Boston Globe story on the Senate plan includes this reaction:
Michael Widmer, president of the Massachusetts Taxpayers Foundation, said the House bill goes too far. The Senate’s spending benchmark “strikes a better balance than the House between the need to squeeze cost out of the health care system without damaging the state’s world renowned health care sector,’’ he said.
He criticized the House’s luxury tax on expensive providers and the “vast powers’’ of an independent new agency “that is going to be inserting itself into the health care system in a major way.’’
On his Not Running A Hospital blog, Paul Levy leans in favor of the House version’s proposal to levy a surcharge on unjustifiably high hospital prices, writing:
As an uninvolved observer, I see evidence of more behind-the-scenes influence by the Attorney General in the House version. Her office has been relentless in pointing out that a major driver of costs in the state’s health care environment is the lack of an effective marketplace, where the presence of size-based and geography-based monopolies has resulted in huge disparities in payment rates from insurers. She has offered rigorous and data-driven reports that document this pattern. The House bill explicitly attacks this, knowing that the sector participants cannot and will not solve it.
Rick Lord of the state’s largest employers’ group, Associated Industries of Massachusetts, writes on AIM’s blog that the legislature should put tighter limits on health cost growth. He said by phone:
“Though we’re pleased the House and Senate are focusing on health care costs, we don’t think the target in either bill is aggressive enough. In March, we came out in support of Gross State Product minus 2 in three years.” That would lower the rate of growth of health costs to about 2% a year, because GSP tends to grow at about 4% a year. “Most economists…have said 30% of health care is either wasteful or inefficient. We’re just challenging the industry to do what every other industry has had to do in the last 20 years: To become more efficient and do more with less.”
As with the House proposal, we’ll judge the Senate bill on the merits – whether it improves the healthcare system on a sustainable basis, and sets goals to lower costs in ways that promote good care and also allow the economy to stay on the right track.
Massachusetts hospitals also strongly support bringing healthcare costs more in line with economic growth. But reform has to be about more than just cost, it has to promote improvement and continued access to care. As some of the state’s largest employers helping to strengthen the economy at a difficult time, we appreciate the need to address healthcare costs in a way that strengthens our economy. The right reform will both produce substantial savings that are sustainable and support the wellbeing of the healthcare system. We have to build on the undeniable progress that the current reform course has achieved.
This legislation makes great strides towards improving the coordination of care and access to preventive and primary care services. We are particularly encouraged by the bill’s approach to incorporating behavioral health services with those that are traditionally provided for physical health. We know that the two are inextricably linked, and believe that this era of health reform provides the much needed opportunity to remove barriers to behavioral health treatment and care.
We support the integration of behavioral health into the overall health system through the establishment of behavioral health medical homes and the vigorous implementation of the federal Mental Health Parity and Addiction Equity Act. Together these laws will make a significant difference to people who need these services.
It is easy to say the two bills look the same from the press release, but are they?
The debate over somewhat arbitrary cost growth goals is pointless, unless there is a debate about the mechanisms to get there. Did we forget that DHCFP data tells us 53% of employers are self-insured in our state and therefore not regulated at the state level?
I am worried, after talking with a number of health care industry folks over the last 4 or 5 days, that each is looking at their slice of the pie and failing to see the big picture… or even questioning how these proposals will play out in implementation.
On the flip side, I worry that folks on Beacon Hill see this debate more as an academic exercise or a political battle, and not establishing comprehensive and sensible reforms that engage consumers.
Please watch this space for more comparisons and caveats today, and we welcome your own thoughts if you have the fortitude to forge through both plans.