Published on Friday, May 18, 2012
STATE HOUSE NEWS SERVICE
In a step that lawmakers said would put Massachusetts on the leading edge of health care cost control, the Senate on Thursday night passed a bill estimated to trim $150 billion over 15 years from medical care costs by setting a growth target and encouraging providers and insurers to adopt alternative payment and care delivery models.
“Once again we lead the nation,” Senate President Therese Murray said after the vote.
The Senate voted 35-2 to approve the complex piece of Legislation that Gov. Deval Patrick, Murray and House Speaker Robert DeLeo have all identified as a top priority for the Legislature this session. Senate Minority Leader Bruce Tarr and Sen. Robert Hedlund (R-Weymouth) were the only two senators to vote against the legislation.
The bill now moves to the House where leaders have already detailed their own version of a bill that differs from the Senate in several key areas, including the House’s proposal for a luxury tax on high-cost hospitals whose price variations from lower-cost community hospitals cannot be justified.
Asked if she would entertain the luxury tax in eventual negotiations with the House, Murray said, “No.”
Health care spending in Massachusetts, which already consumes roughly 40 percent of the state budget, has been projected to double from 2009 to 2020 putting a strain on not just government, but individuals and businesses that are being looked to begin hiring again after the recession.
The bill, which was debated over two days in the Senate and required the consideration of 265 amendments, would seek to limit health care cost growth to a level at or slightly above overall state economic growth.
It aims to achieve that goal by encouraging hospitals and doctors to adopt new care delivery and payment models focused on patient outcomes rather than quantity of care provided, and would transition state-funded health care programs away from fee-for-service to alternative payment systems by 2014.
The Senate has also proposed to invest $100 million over the next five years in a transition to electronic medical records, and another $100 million in wellness and prevention programs paid for with an assessment on insurers.
“This will bring the cost of health care down in the long-term, it will provide better access and better quality of care for them and outcomes of that care and they will still be able to choose their own doctors and their plans and be able to be transparent and go online and see what’s available, where its offered, how much it costs and what is it going to mean out of their pocket,” Murray said.
Tarr, a Gloucester Republican, raised concerns throughout the debate on Thursday about the layers of bureaucracy the bill would add to state government, a point refuted by Democrats who said the bill simply reorganizes existing agencies to provide oversight.
Before the final vote, Tarr said he appreciated the level of “caution and concern” with which his colleagues approached the issue of reforming the health care system, but said he still had concerns about cost, bureaucracy and the uncertain promise of “very, very substantial” savings in future.
Though Tarr ultimately voted against the final bill, he said member of the Republican minority – numbering four – would vote their “conscience” and opposition should not be construed as a lack of respect for the work Democratic leadership put into the bill.
Sen. Richard Moore, one of the architects of the Senate bill, said he was confident the bill would lower costs without jeopardizing the quality of care or the economy. The Uxbridge Democrat said he hoped “the bulk” of the bill would become law after it moves through the House.
During debate on Thursday, Senate Democrats voted to preserve a proposed $40 million annual surcharge on insurers over the next five years, saying those revenues would help pay for electronic medical records and prevention efforts that would lead to long-term health care industry savings. A Republican amendment to strike the surcharge attracted only 5 votes of support, with 31 senators voting against the amendment that proposed using $4 million in anticipated casino revenues to pay for e-records and prevention efforts.
Democratic leaders said it was important to make investments in those areas now, while Tarr said it made no sense in a health care cost containment bill to impose a major new surcharge on health insurers and recommended that the e-records and prevention programs be given time to prove themselves and be funded through the state budget.
Sen. Barry Finegold, an Andover Democrat, also played a prominent role in the debate on Thursday over provider pricing variations and the ability of community hospitals to compete with larger, mostly Boston-based teaching hospitals.
Attorney General Martha Coakley has identified the market clout of some large hospital groups that allows them to command higher prices as a driver of excessive health care costs.
“When the attorney general did a report she found the community hospitals are paid less than other hospitals. The thing about it is there is no correlation between price and quality of care,” Finegold said. “What I am concerned about if you are at the bottom of a food chain, and you are not associated with a major plan or a major player, what is your negotiating power? I am concerned about where we are going to go, and how nonprofit community hospitals survive.”
Finegold withdrew two of his amendments that would have set a floor for hospital reimbursements and allowed for arbitration in the case that providers and payers could not reach agreement on a contract. The arbitration amendment, which had the support of health plans, had been recommended by an independent Provider Pricing Commission and was backed earlier in the day by the Greater Boston Interfaith Organization.
“Amendment 261 – which calls for an independent neutral entity to review contracts rate negotiation impasses between insurers and hospitals is not Government Regulation – it is Common Sense Resolution!,” said a statement from the GBIO.
Senate leaders, however, crafted two compromise amendments that would give the attorney general some expanded authority to track pricing variations and directs a new health care financing institute to identify providers and insurers whose pricing varies 10 percent above or below the average and the factors contributing to that variation.
The Senate also rejected 4-32 an idea put forth by Republicans that would require more Medicaid patients to be enrolled in managed care programs. Tarr estimated the state would save tens of millions of dollars by following the example of 34 other states that have enrolled 21.7 million Medicaid beneficiaries into managed care.
“As we try to address health care costs why would we ignore one of the largest accounts that continues to increase year after year after year,” Tarr said.
Senators did, however, adopted an amendment that creates a long-term care coordinator to help senior citizens sort through care decisions. The new position, to be created with the Executive Office of Elder Affairs, would give seniors an independent care coordinator who will work with a care team to arrange, coordinate, and authorize appropriate institutional and community-based long-term care support and services, including assistance with daily living, housing, home-delivered meals, and transportation.
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