The Incidental Economist

A health care cost control bill that has been making its way through the Massachusetts legislature is expected to pass today. I’ve written about prior versions of the bill here, here, and here. Kevin Outterson tapped out a post as well.

So, what’s in the bill to be voted on today? I wish I could point you to the legislative summary I’ve seen linked to. But the links I’ve seen don’t work (or not for me anyway), and nobody has sent me a copy to host here. If you find one, let me know where or please send it to me. I will update this post if and when I find one.

The full text of the 340-some-odd page bill is here, but I don’t have time to read it now. Gleaning bits from various news sources (listed at the end of this post), here’s what the bill would and would not do:

• The bill is expected to save an estimated $200 billion over 15 years.
• It would cap the state’s health care cost growth rate at the rate of growth of the potential gross state product (PGSP)* from 2013 to 2017. From 2018 to 2022, the target would be PGSP less 0.5. From 2023 onward, it would revert to the PGSP growth rate.
• The bill would create a new state agency to collect data and establish policy (e.g., setting ACO requirements, deciding if the growth targets are met, etc.).
• The bill would (somehow) expand the role of physician assistants and nurse practitioners to act as primary care providers.
• It would (somehow) encourage the creation of ACOs.
• It would create a wellness tax credit for businesses that adopt programs to combat preventable chronic diseases.
• In the area of malpractice reform, the bill would create a 182-day cooling off/settlement negotiation period.
• It would ban the use of mandatory overtime for nurses in hospitals except in emergency situations.
• The bill includes a $225 million surcharge on insurers. This revenue would be dedicated as follows: $135 million for electronic medial systems in community hospitals, a 2% increase in Medicaid reimbursements, $60 million for a Prevention and Wellness Trust Fund, and $30 million to help small providers use electronic health records. (Adding this up, there is a problem. Nothing is left for the 2% increase in Medicaid reimbursements. So the reporting is wrong or the bill is flawed.)
• The bill does not include a proposed tax on hospitals that charge more than 20 percent above the state median price for a service.
• The bill does not include a plan to require separate hospital contracting (breaking up the powerful networks).

My quick reaction (subject to change) is to be encouraged by the ambition of the cost control targets, skeptical that they can be met (where are the teeth?), disappointed that there is so little to address hospital market power, and puzzled by the accounting of revenue and expenditures (as noted in the list above). Since I am not familiar with the details, I don’t have any deeper or more nuanced reaction than that.

Sources for this post: Rachel Zimmerman (twice), Steve LeBlanc, Martha Bebinger, Liz Kowalczyk.

UPDATE: Find more details in the legislative summary.

* PGSP is the GSP adjusted for economic conditions. Think of it as the state’s economic output under full employment.

@afrakt

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