Time to get serious about health care cost control

We got a reprieve from DC. Let’s not squander it.

THIS SUMMER, MASSACHUSETTS and the nation dodged a bullet when the Senate failed by one vote to repeal but not actually replace the Affordable Care Act (ACA). Had it passed, Massachusetts could have lost billions of federal Medicaid dollars. This week, we avoided another disaster as Senate Republicans threw in the towel (at least as of today) on the Cassidy-Graham bill, legislation that would have been worse for Massachusetts than the earlier bill.

These near-miss experiences should serve as a wake-up call. Cost growth in both the Commonwealth’s public and commercial health care markets appears impervious to current efforts to rein it in. Absent fast action, Medicaid could exacerbate state budget woes and high commercial costs that affect businesses and employees alike.

For many years Massachusetts was regarded as an incubator of innovative health care policy initiatives. In the 1990s, it was guaranteed issue, which prevented insurers from denying coverage based on health status, and community rating, which sets premiums based on the health status of a large group, not individuals. In 2006 came Romneycare, and then the 2012 law that created the well-respected Health Policy Commission and ties growth in state health care expenditures to economic growth. This law also makes important strides toward payment reform and includes a first-of-its-kind price transparency law.

Over the years, however, we have seen Medicaid costs skyrocket to 40 percent of the state budget. Our health care costs remain among the nation’s highest and spending limits set by the 2012 law have been exceeded a number of times. Like the rest of the country, we have seen the rise of high deductible health plans, ever-higher out-of-pocket spending, and the return of double-digit premium increases for small businesses and some individuals.

We recently witnessed a showdown between Gov. Baker and the Legislature over a package of fixes the governor proposed. They would have helped offset Medicaid costs with a tax on employers, but would also have moved 140,000 MassHealth enrollees to subsidized plans on the Commonwealth’s Connector exchange, which would have triggered small co-pays, deductibles, and a loss of dental coverage. The Legislature passed the taxes and said it would address reforms this fall.

The administration’s package also contained a five-year moratorium on mandated benefits and proposals to expand the scope of practice for certain medical professionals, such as nurse practitioners, optometrists, and podiatrists. It sought to create a new mid-level provider, called “dental therapist,” which would require advanced training beyond the hygienist level, to perform some procedures that currently can only be performed by a dentist.

The reforms included in the package, which would expand access and ultimately tamp down health care prices, merit serious consideration.

It’s been five years since state health care cost control legislation was enacted. The Legislature has had time to consider adding some muscle to the Health Policy Commission’s power to limit health expenditures and deal with powerful provider groups that command higher-than-normal prices.

Back in 2012, the Legislature could have given the attorney general power to develop unfair trade regulations to limit the growth of such market power. It could also have added enforcement teeth to its novel transparency law. But it chose not to do either.

Since then there have been numerous commissions and studies to examine why costs are so high and offer recommendations, but no new legislation. Some studies that are filled with cost containment conclusions, like the recent Price Variation Report, appear to be collecting dust.

Amid the inaction, a small group of senators recently conducted first-hand research into cost containment practices in other states, with the hope of bringing best practices back to Massachusetts.

Although the Baker administration developed worthy proposals, it failed to introduce them early enough in the process to garner the broad buy-in needed to achieve long-term cost containment.

If the recent past is prologue, Massachusetts could be in serious trouble. To get costs under control, we desperately need the health care expertise for which we are well known, a willingness to do some very hard work, and more than a little political courage.

Meet the Author

Barbara Anthony

Senior Fellow, Pioneer Institute
What nearly occurred in Washington this summer and again this week should scare Massachusetts into bold and immediate action.

Barbara Anthony is senior fellow in health care at Pioneer Institute, a Boston-based think tank.