State Cost Hearings Uncover Lots of Data, But Little Consensus

By Lynda Young, MD, MMS President

During four days of public hearings last week, the Division of Health Care Finance and Policy heard providers, payers, researchers, and members of the public explain, under oath, what they think drives health care cost growth in Massachusetts and how provider prices affect insurance premiums.

Day one focused on trends in premiums and overall health costs. On Tuesday, the spotlight shone on health care price variations, with attention given to Attorney General Martha Coakley’s recent report that questioned whether a shift to global payment would really save money.

The big news coming out of Tuesday’s hearings was support for temporary government price controls from executives representing Lowell General Hospital, MetroWest Medical Center, and Tufts Medical Center.  Among Tuesday’s testifiers, only Dr. Gary Gottlieb, chief executive of Partners HealthCare, came out against government rate regulation. Many smaller providers claim Partners’ market clout hampers their ability to negotiate reasonable reimbursement rates with health plans.

The Wednesday hearings were dominated by pundits and public health officials discussing alternative payment methods and health resource planning. The theme for Thursday morning was care coordination, which is central to improved outcomes and lower costs — and a goal that alternative payment methods may advance. Thursday afternoon, panelists debated the role of government in containing health care costs.  Separately on Thursday, Health Care For All, a consumer health care advocacy group, called for a 2012 freeze on health insurance premium rates.

The diversity of the testimony last week demonstrates the complexity of the problem before us. We’re convinced that better integration and coordination of care is an important part of the solution – but not the only part.

Clearly, there’s a growing appetite for strong government regulation of health care prices. This greatly concerns us. Rate setting wasn’t very effective 20 years ago, and I doubt that it would be any more effective today.

The most comprehensive and realistic approach we’ve seen was produced by the Health Care Quality and Cost Council two years ago. The Council’s “Roadmap to Cost Containment” has been nearly forgotten. That’s unfortunate, because it recommended a focused, multi-faceted approach, in recognition of the fact that we’re dealing with a complex problem. That report is worth revisiting. If we had adopted that roadmap back in 2009, who knows how much progress we would have made by now?

Dr. Young is a pediatrician based in Worcester.

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