Feb. 17, 2011
BOSTON — Massachusetts Governor Deval Patrick is filing long-awaited legislation that aims to rein in the spiraling costs of health insurance.
In a speech to the Boston Chamber of Commerce, Patrick said that thanks to the 2006 health hare reform law, 98% of Massachusetts residents have health insurance.
"Health care in Massachusetts is now universally accessible but it is not universally affordable. Health care costs account for 40% of state spending and have grown at nearly 8% annually over the past three years. That rate of increase pales in comparison to what small businesses are experiencing.”
Patrick says his bill will reduce health care spending by changing the way doctors and hospitals get paid. Right now, doctors receive a fee for each service they provide. Patrick says that rewards the quantity, not quality of care and provides a financial incentive for doctors to order numerous tests and procedures.
Patrick wants to move towards a system where doctors get paid a set amount of money per year for each patient they care for, plus bonuses for keeping patients healthy, called a global payment system.
Patrick’s bill stops short of a mandate. Instead, it would encourage primary care physicians, specialists, and hospitals to form groups called “accountable care organizations” or ACOs to help make the global payment system work.
If hospitals and doctors don’t join an ACO, The commissioner of insurance could reject rate hikes proposed by insurers. Patrick says that would put pressure on insurers, who could in turn put pressure on doctors by reducing fee-for-service payments.
“If the legislation I file today feels like pressure on the market – good! Good! That’s exactly what it’s intended to do," Patrick said.
Critics worry that the ACOs would try to hold down costs by cherry-picking healthier patients and turning away high risk, high cost patients. They also say that doctors and hospitals could band together and drive up costs for the consumer.
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