Briefing: Health Care Costs
Earlier this month, the Massachusetts Senate overwhelmingly approved a bill designed to cut $150 billion in medical care costs over 15 years. It focuses, in part, on providers and insurers adopting alternative payment and care-delivery models, which some in the industry have already put into practice. The effort is an attempt to steer the industry away from the traditional fee-for-service model and toward practices that promote patient wellness.
Meanwhile, the House passed its own bill, which, while it would save $160 billion over the same period, would create a new agency, impose a one-time assessment on insurers and hospitals, and levy a luxury tax on providers whose costs are found to rise 20 percent more than the market median.
How high have health care costs risen?
According to the Massachusetts Division of Health Care Finance and Policy, costs for those covered by private insurance rose 10.3 percent between 2008 and 2009. By comparison, the Consumer Price Index rose less than 1 percent during the same period.
Where do the House and Senate bills differ?
Senate President Therese Murray said she would not consider a luxury tax in eventual negotiations with the House.
What else is in the Senate bill?
Over the next five years, the Senate has proposed to invest $100 million to transition the industry to electronic medical records, and another $100 million in wellness and prevention programs paid through an annual $40-million assessment on insurers.
Where does the industry stand on the bills?
The Massachusetts Hospital Association, which represents the commonwealth's hospitals and health systems, says its members are committed to moving away from fee for service and toward a more integrated system based on healthier outcomes that will benefit patients and cut costs. Meanwhile, Worcester pediatrician Lynda Young, president of the Massachusetts Medical Society, the statewide professional association for physicians and medical students, says fee for service has a place and that any cost reform legislation should not undermine the role of independent physician practices. n
Material from State House News Service
was used in this report.
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