Whither Massachusetts Health Reform?
Jon M. Kingsdale – HealthAffairs 10/40/2021
What is clear is that the machinery for constraining health care spending under Chapter 224 is running out of steam. Like many policy makers in Massachusetts, Martin Cohen, vice chair of the HPC’s board, is concerned that “we’re continuing to see prices rise, big expansions of hospital systems, and large medical groups such as Atrius struggling, so I am not sure I see anything that will constrain costs,” (personal communication, June 15, 2021). Going beyond naming and shaming will require new tools, but, notes Senator Friedman, “the stakeholders really fear HPC becoming a rate-setter,” (personal communication, July 27, 2021). Even the HPC shies away from this role: “When I first asked about rate regulation,” says Cohen, “people looked at me like I had two heads,” (personal communication, June 15, 2021).
Massachusetts struggles with a problem that has plagued US health care for more than half a century. In the mid-1970s, Congress enacted three major health care cost control programs, and President Richard Nixon retained the temporary wage and price controls in health care that he had lifted in every other sector. Back then, national health care spending was about 8 percent of Gross Domestic Product (GDP), and further growth was considered intolerable. (It now accounts for 18 percent of GDP). Along the way, Massachusetts has pioneered various cost containment strategies. With a few other states, it developed hospital rate regulation in the 1970s; in the 1980s, it gave rise to a dozen HMOs and robust competition—a factor in the state’s decision to abandon rate-setting in favor of competition; the market held costs in check in the 1990s but failed spectacularly in the 2000s. So, Massachusetts created the HPC in 2012.
Meanwhile, statewide health care spending per capita remains among the highest in the country, in the world’s most expensive health care economy. To its credit, Massachusetts has tried to address one of the nation’s most stubborn domestic policy challenges. It is still searching for effective policies to constrain health care spending.
