Massachusetts to vote on healthcare cost-control bill

Reuters News
Posted: Jul 31, 2012 4:50 PM
Massachusetts to vote on healthcare cost-control bill

By Ros Krasny

BOSTON (Reuters) - Massachusetts lawmakers on Tuesday are expected to vote on a sweeping bill aimed at containing the growth of healthcare costs and supporting the state's 2006 health reforms, which became a national blueprint.

The 350-page bill, which has broad support from businesses and the healthcare industry, is being debated on the final day of the legislature's formal session, and if passed would go to Governor Deval Patrick for approval.

If passed, Massachusetts would become the first state to try to limit how much providers and insurers can spend on medical care, furthering the state's long history of healthcare innovation.

Central to the bill is a plan to save up to $200 billion over 15 years by pegging the increase in healthcare costs to no more than the rate of growth in the state's economy.

The bill also pushes the creation of "accountable care organizations" designed to provide coordinated medical care for patients in place of the traditional piecemeal approach.

"By paying for quality, not quantity, our state's healthcare delivery system will be better and more cost-effective," said Amy Whitcomb Slemmer, executive director of the advocacy group Health Care for All.

Healthcare spending would be capped at a growth rate no faster than the state economy through 2017, and in the following five years would be constrained further, to half a percentage point below the growth of the state economy.

Massachusetts has been growing at about 3.7 percent in recent years, faster than the United States as a whole. Until recently, medical spending in the state was rising at almost twice that rate.

Patrick, a Democrat, proposed some of the elements in the bill in early 2011 as a way to urgently address spiraling costs faced by state residents and businesses.

Massachusetts achieved near universal health insurance coverage as a result of its 2006 reforms, spearheaded by then-Governor Mitt Romney, now the Republican presidential candidate, and the state's Democratic-controlled legislature.

The 2006 law features a mandate for most residents to either provide proof of insurance or pay a penalty, and was closely mirrored by President Barack Obama's national healthcare legislation.

Architects of the original Massachusetts law acknowledge that cost controls were not a major part of original debate, as the state concentrated first on expanding coverage.

Even so, Massachusetts healthcare premium growth has slowed recently, helped in part by new agreements between insurers and providers that have started to move away from the fee-for-service model.

Other provisions of the current bill include an additional allocation for public health programs, community-based prevention and wellness efforts aimed at preventable chronic diseases, and reforms to medical malpractice laws.

The legislation earned the backing of the Greater Boston Chamber of Commerce.

"It sets a goal for healthcare costs that builds on the progress we've made ... while preserving the innovation that drives our healthcare system," said Jim Klocke, the Chamber's executive vice president.

Associated Industries of Massachusetts, an employer group, said the bill was a first step toward "slowing the runaway health insurance premiums that have impeded job creation and economic growth for a decade."

The group had pushed for a more aggressive cost-control target and greater efforts to root out wasteful spending.

"Controlling the cost of healthcare and health insurance remains the single most important issue for Massachusetts employers," said Kristen Lepore, vice president of government affairs at AIM.

Amid the enthusiasm, the non-partisan Pioneer Institute said the bill was flawed, at best, and would leave the healthcare system burdened with more bureaucracy and costs.

"The legislation rehashes failed top-down strategies of the past, putting government in the position of mandating outcomes rather than creating incentives for individuals," said Joshua Archambault, Pioneer's healthcare policy analyst.

The strategies for pegging the growth of healthcare costs to the state's economic growth were unproven, he added.

(Reporting by Ros Krasny, Editing by Gary Crosse)