Ambitious Health Cost Control Bill Expected To Win Approval Today

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Massachusetts would be the first state in the country to set health care spending goals if a bill released last night becomes law. The legislature is expected to approve health care control legislation today, the final day for formal business in this legislative session.

WBUR’s Martha Bebinger reports:

For years, we’ve complained about health care rising much faster than most other things we spend money on. That complaint may become a thing of the past in Massachusetts. The bill before the House and Senate today aims to link health care costs increases to the potential growth of the state’s economy for five years. Then for the next five years health care spending would have to increase even more slowly than other spending. House Majority Leader Ron Mariano calls this a bold step.

“And one that is going to be a challenge for everyone in the system,” he says. “But it’s one that I think we’re moving towards anyway and I think this bill will help us get there.”

To get there, according to the bill, hospitals and doctors will have to cut their rate of growth about in half. Massachusetts Association of Health Plans president Lora Pellegrini agrees this would be an gutsy, ambitious step.

“No other state has tried to tie health care costs to the state’s economy. This is going to be really revolutionary and important and I’m sure the nation’s watching,” Pellegrini said.

The Massachusetts Hospital Association, which has warned against an aggressive cost control goal, declined comment last night. Mike Widmer with the Massachusetts Taxpayers Foundation says he thinks the health care industry will embrace the bill’s spending goals, even though they are what he considers aggressive.

But, on the other hand, the legislation does not include triggers or punishments if the targets aren’t met.

A new state board could require hospitals that don’t meet the new targets to produce a plan to do so, but there are not, as Widmer says, penalties for failing to hit the goal. While some are relieved that the legislature is setting soft targets, others are not.

“Our biggest concern is whether there are enough teeth to keep overall costs under control,” says Reverend Burns Stanfield, president of the Greater Boston Interfaith Organization. He’s worried that the state won’t enforce new health care spending goals and says the legislation doesn’t do enough to close the gap between brand name hospitals that can demand high prices and small community hospitals with little market clout. The bill does raise money for small community hospitals through a new surcharge charge on insurers. Mariano says this will help the community hospitals compete.

“If we’re serious about providing low-cost alternative care, and quality care, we have to shore up our community hospitals,” he said. “The community hospitals that are struggling now are going to be our low-cost alternatives in most of the major cities.”

The surcharge, which will raise premiums a bit, will also fund a Prevention Trust Fund that public advocates worked hard to include. In addition, it will fund a program to help small providers buy into electronic health records. These are among dozens of elements in the bill that we’ll discuss further on air and here at CommonHealth. Overall, legislative leaders are proud of the bill, says House lead negotiator Steve Walsh.

“Ultimately it’s going to create an environment where patients will get better care for lower costs and we’re predicting it will save upwards of $200 billion over the next 15 years,” Walsh says.

Governor Patrick did not offer comment last night but legislative leaders expect he will sign the bill into law. This won’t likely be the state’s last effort on health costs reform, but is one that the nation is again, watching.

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  • JEngdahlJ

    Centers for
    Medicare and Medicaid Services (CMS) has
    provided $4.5 billion in electronic health record incentives. How might
    electronic health record (EHR)  efforts
    progress from here?   http://www.healthcaretownhall.com/?p=5188

  • Reasonable?

    I hope this is a short term approach because better cost control can be achieved with HSA’s and high deductible insurance.