Massachusetts takes steps forward to curb-out-of control health care costs

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Our next mandate: lower costs and improve care


The Massachusetts legislature took a significant step forward in tackling soaring health care costs when they passed the health care cost containment bill in their last formal meeting of the 2011-12 legislative session.

“This is good news for every resident of the Commonwealth,” said Deirdre Cummings, MASSPIRG’s legislative director. “With health care costs expected to double by 2020, we couldn’t afford delay or inaction.”    

The new health reforms are estimated to save $200 billion in projected health care expenses over the next 15 years. The reforms encourage insurers and health care providers to adopt alternative payment and care delivery models focused on preventive care and patient health rather than the quantity of services and tests performed, invests in public health, and promotes common sense and long overdue administrative efficiencies.  

Some of the key health reforms include: 

1-Payment Reform
The single factor most responsible for runaway health care costs is that  most doctors and hospitals are paid according to the quantity, not the quality of care they provide.

  • The new law will require the state’s Medicaid program, the state’s employee health care program, and all other state-funded health care programs to transition to new health care payment models. It also creates incentives for all other health plans to adopt similar models. These payment models eliminate the old “fee for service” plan, where providers are paid for quantity of care, and instead establishes a model where providers are paid based on health outcomes.

2-Streamlined Billing and Information Technology
In our fractured, balkanized health care system, we are drowning in administrative inefficiencies.  One example: the array of different forms, codes, and billing procedures insurers require doctors to use.  These systems are different for each insurer and often rely on paper records.  Further, increased use of computerized systems integrating all of a patient’s health care data reduces medical errors and improves coordinated care.

  • The new law will require the development and use of fully integrated electronic medical records, uniform billing/administrative process and e-prescribing between various health care facilities

3-Investing in Public Health and Prevention
Investments in public health lower health care costs by preventing health conditions that drive up health care spending, such as diabetes, heart disease and asthma. Data shows that upfront investments in prevention reap significant savings throughout the health care system.

  • The new law will invest in public health by incentivizing wellness and creating the Prevention and Wellness Trust Fund with $60 million to invest in community based disease prevention, public health and wellness. We hope the Trust Fund will be extended beyond the initial 4 years in the law. 

When empowered with clear, comparable, timely and meaningful cost and quality data, health care consumers are better able to leverage appropriate care and at lower costs.

  • The new law will establish a fully transparent, easy-to-use and comprehensive health care website.  Information about costs, including out of pocket costs; payment methods and incentives; health outcomes and consumer satisfaction by hospital, procedure and medical group; and insurers’ progress toward controlling costs will be transparent and available to the public.

5-Consumer Protection

  • The new law will require consumer representation on the Health Policy Commission an oversight board ensuring that patients’ voices will be part of the decision making in establishing new cost saving health plan models; and requires that the new health plan models continue to ensure patients have access to all “medically necessary” services.   

More Resources:

Legislative Fact Sheet on the Health Care Cost Control Reforms

Health Care Cost Control Language

MASSPIRG’s steps to controlling health care costs