Patrick pushes health care cost controls
Says growth can be slowed without damaging quality
Governor Deval Patrick said Tuesday he is confident that health care cost increases can be slowed to no more than the annual growth of the Massachusetts economy without harming the hospitals and doctors that make up the state’s dominant industry.
Speaking to the Greater Boston Chamber of Commerce, Patrick did not explicitly put his support behind either of the two cost-containment bills being debated in the Legislature. However, he said he probably would not support anything that allows health spending to continue to grow more quickly than the gross state product, a measure of economic activity.
“I think the industry can do better than GSP,’’ he said. “I certainly could not imagine accepting GSP plus anything.’’
The Senate proposed a plan last week that would allow health costs to grow half a percentage point more than the rate of growth of the state economy, until 2016, and then equal to it until 2027. A separate House bill would pin the growth of health costs to the economy’s growth rate until 2016 and then limit it to half a percentage point less than the overall state rate.
The state’s major hospital and physician groups oppose a benchmark that would require the growth of spending on health care services to drop below the rate of overall spending in the state, saying such an aggressive requirement would cost jobs.
That kind of change would be precipitous, said Lynn Nicholas, president of the Massachusetts Hospital Association.
“It would cause us to have to close services, minimize hours, triage what we do, when we do it, how we do it,’’ she said Tuesday. “That would have direct implications in terms of job loss.’’
Nicholas said her group is open to a target set at the rate of increase of gross state product, but wants to see a slow movement toward that level over the next five years or so. “You can’t drop from where you’ve been to GSP immediately overnight,’’ she said.
In recent years, health costs in Massachusetts have been rising 6 percent to 8 percent a year, about twice the 3.6 percent increase in the gross state product.
Patrick did not get into specifics on how soon health spending should be brought in line with the economy’s growth. The governor said it is possible for the health care industry to keep its cost increases below the growth of the gross state product, citing programs hospitals and insurers have already put in place that have reined in costs without sacrificing quality and even improving it.
He also said legislation should not tie health spending to a benchmark that is higher than the growth in the state economy overall. His spokesman, Brendan Ryan, said after the speech that Patrick has not settled on whether the limit should be equal to the state gross product or below it.
Patrick also said he opposes a plan in both bills to create a new entity to regulate health costs.
“Creating new quasi-independent agencies with less accountability to the public is a bad Massachusetts habit,’’ he said.
Instead, a bill Patrick submitted to the Legislature last year to control health care costs would give the state commissioner of insurance more authority in holding down spending. The commissioner would be able to scrutinize contracts between insurers and providers and reject those that include rates deemed excessive.
“There are a whole host of different touch points for the health care industry across state government,’’ Patrick said. “I would support consolidating what we have under one umbrella, and sharpening the mission.’’
James Roosevelt Jr., president of Tufts Health Plan, labeled the governor’s proposals “a very positive, balanced approach.’’
He said that the next six weeks, as the House and Senate bills are debated, are “very critical’’ to the state, since they will determine the long-term cost of health insurance. Massachusetts families previously had the highest premiums in the country; now they rank ninth.
“By bringing that under control, businesses notice that,’’ said Roosevelt. “If we can sustain that, it will help current businesses and ones that are considering moving into the state.’’
More broadly, the governor defended the notion of government intervention in the health care marketplace.
“I am a capitalist,’’ the former corporate legal counsel said. “I am not a market fundamentalist.’’
He added: “I am not interested in government intervention for the sake of government intervention. I am interested in completing the vision of health care in Massachusetts: accessible, high quality, affordable care for everyone. That is [in] the public’s interest, and government’s job is to serve the public’s interest.’’
Patrick said cost-control efforts by insurers and health providers have been propelled by his administration’s opposition to premium increases, which helped spur creation of limited-network plans and small business co-ops.
Like the hospital association, the Massachusetts Medical Society, which represents most of the state’s physicians, has warned that “any benchmark below the annual growth in the state’s economy is too aggressive.’’
In a statement last week, it said, “We support an approach that establishes a reasonable cost-control goal over a reasonable period of time.’’
Still, Nicholas, of the hospital association, was not especially concerned about the governor’s comments on the cost target, since he also talked extensively about efforts by hospitals to control costs and about not wanting to interfere too much in the market.
“I think he’s just keeping the pressure on,’’ she said.
The Senate began debating its bill Tuesday, starting to make its way through 265 amendments.
To start, Senate Democrats turned back Republican efforts to postpone debate on the bill until after state budget deliberations or until after the US Supreme Court rules in a case challenging the federal Affordable Care Act.
Senators expect to resume debate on the bill Thursday.