When Massachusetts lawmakers sit around discussing state healthcare options, one can't help but wonder if they have the classic 1980s Whitesnake tune blaring in the background. Here I go again on my own. And while it may be a stretch to suggest Massachusetts lawmakers have heard of Whitesnake (trust me, that band did exist), the state has once again gone where no state has before passing the nation's first comprehensive healthcare cost-control legislation. The 350-page bill holds healthcare cost inflation to the rate of the state's economic growth, or below, a move lawmakers estimate will save the state up to $200 billion over the next 15 years.
This can be seen as a phase two to Massachusetts groundbreaking 2006 near-universal healthcare reform legislation, which included the nation's first individual mandate. The cost-control issue has been a concern since the law was passed. Now that it has come to fruition, the new cost-control bill, which Democratic Gov. Deval Patrick will sign, has once again put Massachusetts squarely in the healthcare spotlight.
The centerpiece of the legislation ties healthcare costs to the general growth of the state's economy, around 3.7 percent annually, from 2013 to 2017. Healthcare costs in the state have been rising around 6.7 percent to 8 percent annually. From 2018 to 2022, the bill calls for spending to slow to around 0.5 percent below the growth of the state's economy. Some organizations in the state called for a more aggressive number, perhaps a full two percentage points below the gross state product, but rational heads prevailed.
In addition, the bill encourages establishment of accountable care organizations and patient-centered medical homes and expands scope of practice for nurse practitioners and physician assistants, who will have a larger role in primary care under these new arrangements. Over the next four years, the bill also dedicates $60 million to community health and $135 million for investment in infrastructure at community hospitals. It establishes a tax credit of up to $10,000 for employers who set up workplace wellness programs. It also directs state agencies to form a uniform procurement unit to negotiate for bulk purchases of pharmaceutical products and creates a commission to lower the cost of prescription drugs for public and private payers.
In terms of payment reform, the bill moves payment away from fee-for-service and toward bundled or global payments, mandating the state's Medicaid program and employee healthcare program to transition to the new payment methodologies. This has already been happening in the private market, as the state's top insurers have been working to sign provider groups to contracts which reimburse through global payments rather than FFS. In addition, Massachusetts insurers have been rolling out limited and/or tiered network offerings at a rapid clip, hoping to push consumers toward more affordable and appropriate options for care.
That being said, the bill itself does have some skeptics. For instance, some say the desired results may simply be unattainable, while others have questioned whether the state will steadfastly enforce the new spending goals. Those not hitting the targets will not incur penalties, but instead may have to provide a blueprint on how to get there. Overall, the Massachusetts Hospital Association was cautious about the bill, specifically pointing out healthcare cost drivers such as an aging population and nationwide obesity epidemic. However, hospitals did dodge a bullet with the removal of a luxury tax that was included in the House version of the original bill. In that version, hospitals would have been hit with a tax if it was determined high prices weren't paired with above-average quality.
There is obviously much hard work ahead, but Massachusetts is undaunted . The law's success, or lack thereof, will be determined over time. Until that point, the state certainly deserves credit for going out again on its own.
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