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Mass. making progress in containing health costs

Hospitals, doctors, and insurance companies appear to be making headway in holding down the price of medical care, but during state hearings Tuesday, health leaders said they see signs of a potential backslide that could again cause costs to rise steeply.

They made their comments during the first day of closely watched testimony on whether providers and health plans are complying with a new state law that limits how fast health care costs can grow. The law sets a target for medical spending to climb no faster than the state economy overall, about 3.6 percent this year.

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“Things are looking good for 2013,’’ said Dr. Gary Gottlieb, chief executive of Partners HealthCare, a provider network that includes Harvard teaching hospitals Massachusetts General and Brigham and Women’s, and has been tagged by regulators as one of the most expensive systems in the state.

Gottlieb said that Partners has renegotiated contracts with large insurers to take lower price increases than originally promised. The network also is turning its primary care doctors’ practices into so-called “patient-centered medical homes,’’ which provide more intensive care to complex patients in order to improve their health and reduce expensive hospital and emergency room stays.

Even as chief executives from other providers and insurers echoed his comments, health care leaders pointed to a red flag: Companies are increasingly offering employees health plans that allow them more freedom to choose doctors and hospitals and that generally do not require referrals from primary care doctors for specialty care.

The plans make it harder for doctors to track patients, coordinate care, and control costs. Under these plans, insurers generally still pay a fee for every visit and procedure, a payment system that has been blamed for driving up spending.

Insurers say they can more easily control costs by instead paying providers so-called global payments, which give hospitals and doctors a budget to care for groups of patients.

The law sets a target for medical spending to climb no faster than the state economy overall, about 3.6 percent this year.

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Many providers also prefer global payments. Dr. Jeffrey Lasker, president of New England Quality Care Alliance, a physicians network affiliated with Tufts Medical Center, said that “we’ll be under the benchmark too,’’ but that he can only track spending on patients in global-payment plans. “The patients we don’t have data on, that’s my concern. We don’t know where the trend will be.’’

The hearings were organized by the new Health Policy Commission, which is chaired by Brandeis University professor Stuart Altman. He said “this movement back toward’’ fee-for-service medicine “is really going to hurt us.’’

Aron Boros, executive director of the state Center for Health Information and Analysis, said he would not know until about August next year whether the state met its benchmark for 2013. He said the signs are promising, but he cannot predict the outcome.

Liz Kowalczyk can be reached at kowalczyk@globe.com. Follow her on Twitter @GlobeLizK.
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