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Mass. lawmakers pass health care bill

Governor says he’ll sign cost-control plan, but some experts skeptical of its success

Lawmakers overwhelmingly ­approved a massive health care cost-control experiment Tuesday that they predicted will save billions of dollars over the next 15 years. But some industry leaders cautioned that it relies heavily on unproven tools to achieve the savings.

The plan, which Governor Deval Patrick said he would sign into law, contains many of the most promising ideas for curbing health care costs. Legislators and the governor are counting on saving $200 billion through a first-in-the-nation statewide medical spending target tied to the overall growth of the state economy, a transition to a budget-minded payment system for hospitals and doctors, the growth of large provider organizations to ­coordinate care, and greater cost transparency for consumers.

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“This is more than a good bill; this is a great bill,” Patrick told ­reporters Tuesday afternoon. “This is a commonwealth that has shown the nation how to extend coverage to everybody. . . . And now we’re going to crack the code on cost control.”

But many of these methods to save money have mixed track ­records or are untried on a large scale, meaning that success is far from guaranteed. The state will be charged with gathering and analyzing detailed and timely data on the cost and quality of medical care statewide. But providing information to consumers about the price of tests and procedures, for example, has generally not led them to favor less-expensive providers. In fact, sometimes the reverse happens ­because people associate higher cost with better quality.

“Many of these are good ideas, but I don’t see any game-changers here,’’ said Paul ­Ginsburg, president of the Center for Studying Health System Change, a nonprofit research organization in Washington, D.C., that studies the Boston market.

Still, many consumer and business groups applauded the legislation as a reasonable start to solving a tangled problem.

The Senate passed the cost-control legislation unanimously, while the House gave its ­approval in a 132-to-20 vote. Patrick has 10 days to act on it.

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Some House members grumbled about having to vote on the 350-page plan, a compromise between previously passed House and Senate bills, less than 24 hours after it was filed, giving them little time to review it. “I can’t get through a book I like in 24 hours,’’ Representative Daniel Winslow, a ­Republican from Norfolk, said in an interview.

Representative Steven Walsh, a Democrat who led the House effort on cost control, responded, “For two years, we’ve accepted criticism for not moving fast enough.”

Representative Ronald Mariano, a Quincy Democrat who helped negotiate the final legislation, said that as the state is held to spending targets, “you are going to see people making smarter decisions on buying insurance products; you’re going to see doctors making different decisions on how they treat people.”

The first step will be to reconfigure an existing government agency and a council into two semi-independent offices to oversee implementation of the legislation. A Center for Health Information and Analysis will collect spending data from providers and insurers, develop ways to measure quality of care, and identify providers and insurers whose costs are growing faster than the target.

The target allows health care spending to grow no faster than the state economy overall through 2017, about 3.7 percent this year, “the first time any state has attempted to set the goal for everyone in health care to strive for,” said Senator Richard Moore, an Uxbridge Democrat who oversaw the Senate’s efforts.

For the following five years, spending would slow further, to half a percentage point ­below the growth of the state’s economy. In recent years, medical spending in Massachusetts has climbed 6 percent to 7 percent annually.

Providers and insurers that exceed the target will have to file performance improvement plans explaining how they will cut spending. A Health Policy Commission governed by an 11-member board will oversee the plans, certify new payment methods, and develop policies needed to implement the legislation. In two years, the commission will start to conduct market impact reviews of certain providers, including those trying to expand and those that do not meet the state’s spending benchmarks. Under certain conditions, the commission can refer a provider to the attor­ney general for investigation.

Lynn Nicholas, president of the Massachusetts Hospital ­Association, said that hospitals ­“already are working hard to get their costs down and they have,” but that many drivers of medical spending such as the obesity epidemic are outside providers’ control.

As 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.

In his remarks yesterday, Patrick said he does not believe the legislation will lead to layoffs and hospital closings. “There are going to be changes,” he said. “But if those changes mean we get lower-cost and higher-quality care because care is being delivered in different settings — in homes, for example, in neighborhoods, in communities, rather than in hospitals — then I think that’s something we all ought to strive for and will strive for.”

The legislation requires the state Medicaid and state ­employee health care programs to move to new payment systems, such as so-called global payments, which give providers a budget to care for groups of patients. This system would replace paying a fee for every visit, test, and procedure, which is blamed for driving up spending because it has few limits on the number of services.

The bill encourages but does not require private insurers to do the same, which ­Ginsburg said is a mistake. “That would have been the full payment reform initiative,” he said. “The bill seems particularly weak in moving the payment system.”

Leonard Marcus, director of the program for health care ­negotiation and conflict resolution at the Harvard School of Public Health, said the bill pulls together programs that have been tried in various contexts on their own.

In many ways, the model outlined by the bill mimics health maintenance organizations that gained popularity in the 1980s and 1990s and lost favor as patients and doctors decided they were too restrictive. The difference, Marcus said, is that the bill would also make much more information about health care costs and quality available to consumers, with the idea that they may use it to find a good, less-expensive doctor. “The question is, will people use it?” Marcus said.

Unlikely, said Dr. Ashish Jha, associate professor of health policy at the Harvard School of Public Health. The kitchen-sink approach to slowing health costs is a good one, Jha said. But he is skeptical about whether people will change their behavior as a ­result of having more information available.

“It’s not because there’s no evidence that they do,” Jha said. “It’s because there’s very good data that they don’t.”

Joshua Archambault, director of health care policy at the Boston-based Pioneer Institute, said the law falls short ­because it does not require ­patients to foot more of the bill.

“Until you fully engage the consumers and they feel like they’re spending their own health care dollar, you won’t be able to save money,’’ he said.

Archambault also pointed out that in Medicare experiments with accountable care organizations — large provider groups that coordinate all of a patient’s care — some saved money, but many did not. They are a key component of the Massachusetts plan.

Michael Levenson of the Globe staff contributed to this report. Liz Kowalczyk can be reached at kowalczyk@globe.com;
Chelsea Conaboy at
cconaboy@boston.com.

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