Yesterday, the Massachusetts legislature passed a bill which Governor Patrick is expected to sign, that is claimed will dramatically lower health care spending in the state. How will they do this?
You tell me after you read the new law.
But first, a bit of background. Under Romneycare, passed in 2006, residents were promised that health care costs, and health insurance premiums would dramatically fall. Five years later, costs are rising at the rate of 6% to 7% per year, and premiums are the highest in the country.
So, Massachusetts has waived a magic wand that will change all that. The new law provides that the growth in total health care spending per year cannot exceed the growth rate of the state’s economy, which is currently about 3.7%, for the next five years, and one half a percentage point below the growth rate of the state’s economy after that.
Voila…problem solved, and the legislature can go on vacation.
It is apparently up to the insurance companies to figure out how to accomplish this magical result, and, if they can’t, they could be subject to a $500,000 fine, which most assuredly will go a long way to reducing premiums.
Other than that, several other options have arisen.
Lynn Nicholas, president of the Massachusetts Hospital Association, said that hospitals ’already are working hard to get their costs down and they have,’ …[a]s pressure grows on hospitals to cut spending, she said, workers may lose their jobs or be forced to acquire new skills, and hospitals may close or limit services. “We just don’t know what it’s going to take to get down to that level’’ of spending, she said.
But, you will be happy to learn that Governor Patrick does not believe that any jobs will be lost, or services cut.
Another option, outlined in the law as a “model”,
…mimics health maintenance organizations [HMO’s] that gained popularity in the 1980s and 1990s and lost favor as patients and doctors decided they were too restrictive.
That is somewhat of an understatement. HMO’s were so despised by the people that many states outlawed them.
So, you tell me. How do you believe Massachusetts will lower the growth of health care spending by almost 50% from today’s growth levels?