House Passes Bill to Cut Health Care Costs

Last week I joined my colleagues in the Massachusetts House of Representatives in passing legislation that addresses the unsustainable cost of health care while allowing the health care industry to continue to provide world-class quality care.

This legislation seeks to reduce health care costs while allowing our world renowned health care system to thrive.  The legislation provides patients’ tools to make informed health care decisions. Under this legislation, consumers will gain access to detailed comparative price and quality information; they will also gain important information from providers about services and payment.

The bill promotes health information technology and the use of electronic health records that will bring efficiencies and cost savings. The implementation of a fully interoperable health information exchange by 2017 will allow for secure electronic exchange of health records amongst providers. This bill reduces medical spending by setting a target for health care spending to grow less rapidly than the gross state product and allowing consumers to spend out-of-pocket, or through supplemental insurance, for any service or procedure they deem appropriate.

In these tough economic times, this legislation also helps our local hospitals, many of which are struggling to stay afloat. This bill requires high-cost providers to show quality or unique service to justify their higher prices and creates a one-time assessment on payers and providers with more than $1 billion in reserves to protect our community hospitals through a Distressed Hospital Fund. Community hospitals may apply for a competitive grant from this Fund, allowing them to thrive over the next 36 months before anticipated savings from the reform allow them to flourish on their own.

Other provisions of the bill include:

• The adoption of alternative payment methodologies such as global and bundled payments for acute and chronic conditions as the industry transitions away from the fee-for-service reimbursement system that promotes quantity rather than quality;
• The creation of a smart tiering system that makes services that are often unaffordable for some patients more accessible for patients by allowing payers to tier by service rather than facility and allowing patients to pay reasonable cost-sharing for more expensive unique services;
• The implementation of the University of Michigan Health System’s Disclosure, Apology and Offer program, which resulted in a decrease of litigation costs and a reduction of malpractice claims;
• The further development of a well-trained health care workforce through training, placement, and career ladder service programs, loan forgiveness grants for primary care providers, and residency funding in primary care settings;
• The improvement of the operation of the Medicaid program; and
• The simplification of administrative procedures in health care settings.

Let me know your thoughts by leaving a comment below.