Health care providers, business leaders, lawmakers and policy experts looked back Thursday at the passage of the state's new health care cost control and payment reform law, contemplating the changes it will make to the health care market.
During the Massachusetts Association of Health plans annual conference at the Seaport Hotel, a panel of experts discussed the upcoming impacts of the law signed by the Gov. Deval Patrick in August. The law implements and enforces cost growth goals and regulates alternative payment methodologies.
Television and radio talk show host Jim Braude, who moderated the panel, said discussions about health care generate more interest than any other topic. Braude said he wonders if it is because there is interest or confusion. Many listeners and viewers tell him they don't know how to "pick one phone company" never mind decide on a health care provider, he said.
Dolores Mitchell, executive director of the Group Insurance Commission, said when she was first hired 25 years ago by Gov. Michael Dukakis, "The governor said to me, 'the one thing I want you to do is get your arms around the cost monster.' "
"That was 25 years ago. I do not feel at this moment in time that I have yet gotten my arms around the cost monster," she said.
Mitchell said she feels confident the state's recent request for bids for health insurance will make a dent in costs because the request for proposals sets aggressive fiscal restraints. The bids are due Tuesday.
"We are telling bidders that we will not accept anything higher than a 2 percent increase in the commonwealth's cost for the next two years. And we expect them to move from flat to a minus trend for the next five years of the contract," she said.
Health insurance providers are also expected to move a substantial number of GIC employees into integrated delivery plans, Mitchell said. There will be penalties for those who fail to meet targets or set up integrated delivery systems, according to Mitchell.
"There are some who say this is too much change with too little time to implement it. We say in response we have waited long enough," she said. "We do know that the provider community is already moving in this direction. Our goal as a very large purchaser is to seize the goal and the momentum. The major changes we are seeing is providers merging and getting stronger. I have yet to see the economies of scale. There will never be a better time for change than now."
Rick Lord, president and chief executive officer of the Associated Industries of Massachusetts, said his organization got involved in the health care debate because business leaders realized the status quo was not sustainable. Employers, when surveyed two years ago, said the cost of health care dwarfed all other concerns. A.I.M. represents 6,500 employers across the state.
"And frankly, it was not sustainable for state government. State government cannot continue to spend 40 percent of its budget on health care," said Lord, who was appointed to the new Health Policy Commission created under the law. "It is part of the fiscal cliff facing us in the state. Our economy will deteriorate and so will state government's ability to take care of its most vulnerable citizens."
The health care cost containment law sets targets to slow the rate of health care costs to match the growth in gross state product. Lord said his organization advocated for a lower growth rate, but they are pleased there is a target.
Rep. Steven Walsh, co-chair of the Health Care Financing Committee and one of the author's of the new law, said lawmakers did not want to cap rates or create rate regulations. When the law was crafted, Walsh said, lawmakers sat with providers, patients and hospital executives to "figure out how far we could push without tipping over."
"Government was smart enough to figure out we are not the experts. We left the real details to the people who know how to do it, you people," he said.
Lawmakers did not tell health providers how to cut costs; they just asked them to not make fee-for-service the primary form of payment, Walsh said.
Braude asked the panel about the charge made by some critics of the law that it does not have enough teeth in it. Walsh said this law was the first step in reforming health care costs, and if changes need to be made, lawmakers will revisit it.
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