With Health Care Costs, A Nudge From The State Beats A Push
The maze that is our national health care system has many twists and turns, and is beset by thorny issues and political wrangling. Take the controversial Affordable Care Act, rising costs and insurance premiums, the continuing threat of malpractice lawsuits and slow adoption of information technology to help deliver more effective care, just to name a few of those issues.
Massachusetts, of course, has been out front in this area since the 2006 passage of the state’s health insurance reform law, which required nearly everyone in the commonwealth to be insured. That goal has largely been accomplished, with only 5 percent of Bay State residents uninsured as of 2010, compared with 16 percent nationwide, according to The Kaiser Family Foundation.
While Massachusetts inches toward the goal of getting everyone insured, though, health care costs in the state have been - and remain - well above national averages. For instance, health spending per capita in 2010 in Massachusetts is 36 percent above the national mean and hospital expenses 27 percent above average, according to the Kaiser data.
The state Legislature has jumped in again, pushing for further controls on health care costs. But a comparison of the two bills – one designed by the House and the other by the Senate – offers us yet another clear choice; between incremental change and a stronger dose of government intervention. The Senate bill, introduced last Wednesday, provides the more prudent path, since it would nudge health care providers to adopt new care delivery and payment models focused on patient outcomes rather than how much care is provided. This reflects a trend already in motion in the market, as providers – notably Worcester-based Reliant Medical Group and Harrington Healthcare System of Southbridge – have already begun to embrace that model. It represents more of an evolutionary, rather than revolutionary, direction.
The Senate’s bill would also allocate $200 million over five years to fully transition providers to electronic medical records by 2015 and to help community-based providers to develop plans that would more effectively address chronic conditions such as diabetes. (The House bill, on the other hand, would create a new state agency and would call for surcharges on providers for excessive costs.)
In addressing the Senate bill, State Sen. Richard Moore (D-Uxbridge) and Senate President Therese Murray told The Boston Globe they don’t want to harm an industry – and one that’s important to Central Massachusetts – that provides one of every seven jobs in the state. Murray told the Globe she is concerned about doing “something too drastic too fast.’’
We see that as the correct approach. The health care industry nationwide is deservedly under heavy cost-reduction pressure. Locally, UMass Memorial Health Care, the largest employer in Central Massachusetts, was seeking to sell two of its business divisions earlier this year, a move that could result in 700 to 900 layoffs as it sought to cut $50 million in expenses.
The health care industry is important to this region and our state. Yet, after decades of unsustainable cost increases, letting market forces run their course has proven a massive failure. By most measures, the state’s health care reform law has delivered on its promises. While overregulation is not welcome, the state and federal governments continue to play important leadership roles to prod, incent and penalize the industry to get its costs in line and end the open checkbook that has fueled the unsustainable rise in costs. Partisan politics has made many of the health care issues politically toxic, but each year we dither without meaningful reforms will cost us more down the road. Massachusetts should be proud of its leadership role and should continue to innovate and push for solutions to this critical issue. n
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