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Wednesday, 1 August 2012

Massachusetts nibbles at the cost bullet

On the last day of the legislative session, the Massachusetts Senate unanimously approved a 350 page health reform bill. The House approved it by 132-20. Governor Patrick has said that he will sign it. (The bill itself is not yet available on line - I've read about it but not yet seen it.)

Like the Affordable Care Act, the Massachsetts bill includes a wide range of policy steps - creating an oversight agency, promoting transparency about costs, supporting wellness programs, encouraging global budgets and an end to fee-for-service, and more. But the key component is the line in the sand about overall health care costs: between 2013 - 2017 cost increases should not exceed the growth of the state economy. For 2018 - 2022 cost increases should be at least 0.5% below the state economy growth.

So what happens if costs exceed the target?

Since total health care cost is the sum of thousands of independent charges (by hospitals, medical offices, equipment vendors, and more) and payments (by insurers, patients, government, and more), there's no one to hold accountable and no real enforcement mechanism.

Representative Steven Levy's twitter comment on the cost containment commitment was (1) "lol" and (2) "only concrete thing in it is more bureaucracy and fees." He's not right, but he's not completely wrong.

Even without a true accountability structure or enforcement mechanism, the cost commitment matters. The situation reminds me of all the times my wife and I said to our sons some form of - "we expect you to do XYZ." By the time they were teen agers they were smart enough to ask - "what happens if I don't do XYZ?" We tried to avoid too much sabre rattling and generally said something like "we expect XYZ to happen - if it doesn't we'll deal with it then..."

Of course XYZ didn't always happen. Sometimes there were consequences. Sometimes there were apologies and resolutions to do better. Occasionally our sons would persuade us that XYZ was the wrong expecation - it should have been ABC. But we always took it seriously if XYZ didn't happen.

Managing a state with 6.5 million residents and $80 billion in health expenditures is rather more complex than managing a four person family, but I expect the same process I experienced as a parent to happen in Massachusetts.

Until now we've not had explicit expectations for health costs. Now we do. Measuring how we're doing in relation to a commitment is different than wringing hands over "unsupportable cost increases." Our legislators and Governor have made a promise. It's not clear how they, and we the citizens, will accomplish it. But we can't avoid paying attention to it, working on it, learning from what happens, and taking next steps.

The law sets a process in motion. It's not a silver bullet. It's more like tying a string around  a finger to ensure vigilant attention. But that's more than our state, or any state in the U.S. has done before.


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