Legislation in Massachusetts Helped Control Health Care Costs

The legislatively appointed Health Policy Commission in Massachusetts is a concept that is catching on in at least 8 other states.

Massachusetts passed legislation in 2012 to form a health care commission with the goal of controlling the growth of health care costs in the state. Since the establishment of the commission the state has successfully brought their cost growth below the national average.

Growth control rather than state by state cost comparison was the overall intention since Massachusetts currently ranks as having the third highest health care costs in the country as a result of the amount of world-renowned and state-of-the-art specialists that operate in the state. They are ranked just below Alaska and New York State in the top three.

The Route Fifty article went on to highlight some features of the program that could make the Massachusetts Health Policy Commission a potential model for other states. A major component of the initiatives success was how they collected and applied the data insights which provided metrics on almost every aspect of health care spending in the state. The commission claimed the breadth of data collected along with the simple concept of setting a goal were the major drivers of their success. It allowed them a gauge to measure the information against and thus the cost growth benchmark was established at 3.6 percent or lower.

As an example, the commission collected a substantial amount of data across the state to compare performance and costs of various organizations in relation to each other. This cost comparison approach across the providers made it easier for the commission to identify those organizations where spending exceeded the cost growth benchmark. The commission would then contact the provider and request a performance improvement plan.

Current efforts to collaborate with providers to bring their costs into compliance were successful but some contributors to the report suggested the programs continued success would require more force when it comes to dealing with the organizations that simply pay the fee with no effort to adjust their practices. The penalty is currently set at a $500,000 cap for providers who do not comply with the request, but there is potential to raise this limit with new legislation.

The article listed a number of states attempting to follow suit such as Delaware, Rhode Island, Connecticut, New Jersey, Nevada, Oregon, Washington and California by creating their own initiatives aimed at reducing the rate of cost growth.

Read the full article here.

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