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Senate Advances Health Cost Bill; House Urged to Set Ambitious Goal

Posted on May 18, 2012

Two days after Governor Deval Patrick suggested that the health-care industry could slow the growth of medical spending below overall economic growth, the Massachusetts Senate approved a bill that sets a less ambitious objective of keeping health spending changes equal to economic output beginning in 2016.

Health Care CostsThe Senate voted 35 to 2 last night for a bill that leaders say will save $150 billion over 15 years by limiting health spending growth to 0.5 percentage points above gross state product from 2012-2015 and equal to GSP thereafter. The measure would create a quasi-public Health Care Quality and Finance Authority to monitor compliance with health cost objectives.

It would also require insurance companies and doctors to tell patients what the fee and final payment will be for a particular medical procedure. Massachusetts would raise more than $200 million over five years in assessments on insurance companies to fund wellness programs and electronic medical records.

The Senate cost-control bill now moves to the House of Representatives, which wants to slow health cost growth to half a percentage point below gross state product after three years.

AIM has set a far more aggressive cost-control target, calling upon the health care industry to reduce the growth of medical spending to two percentage points below overall state economic growth. The aggressive target is attainable for an industry where experts believe that $1 in every $3 is wasted because of care delivered in the wrong setting; marked by a lack of coordination; provided with an inadequate emphasis on prevention; harmed by medical errors; burdened with rules and fraud; or just plain excessive. 

Soaring health insurance premiums impede the ability of Massachusetts employers to grow and create economic opportunity for the citizens of the commonwealth.The average cost paid by employers and workers to insure a single Massachusetts family though a health maintenance organization now stands at $15,864, according to the 2012 AIM Benefits Survey. The cost to insure an individual is $6,000.

Patrick said earlier this week that “I think the industry can do better than GSP.” AIM agrees.  This is a once in a generation opportunity to pass a bill that will solve the state’s health care cost crisis.