Until William F. Weld arrived at the State House as governor in 1991, it had been assumed for decades that state government had an important role to play in overseeing health care costs. When hospitals wanted to add more beds, for instance, or provide cardiac catheter services, they had to make their case to state regulators that such moves were in the public interest. At the same time, the state’s rate commission helped collect cost data from providers and establish the rates that hospitals could charge for procedures, within broad parameters.
However, those efforts were deemed too radical by conservatives in state government. Weld and his secretary of health and human services, Charles D. Baker, are viewed today as moderate Republicans. But in fact they were devout libertarians when it came to issues regarding government regulation. Their mantra was not so different from the Tea Party backers of today — the less government, the better. In health care, the Weld administration essentially deregulated the system in 1992, based strictly on ideological grounds. Hospitals could charge what they wanted, passing on the costs to insurers — who, in turn, passed them on to employers and the economy as a whole.