An Alternative Health Care Cost Containment Proposal

Today I will be offering an amendment to substitute new language for the health care cost containment bill, S.2260, currently being debated by the Massachusetts Senate.

While incorporating many of the concepts included in the original text of the bill, and many of the amendments which have been adopted thus far during debate, it contains several important differences from the approach contained in the original bill. The new text:

1. Imposes no additional surcharges on participants in the health care system, avoiding millions of dollars in new costs which could ultimately impact consumers and providers, in addition to the payors targeted in the original bill.

2. Combats costly mandates, which have added more than $1.3 billion, or 12 cents on every dollar, to the cost of health care in Massachusetts.

3. Sets an aggressive goal of limiting the increases in health care to the Gross State Product, but requires legislative approval and public hearings to ensure that the benchmark is set with careful deliberation, broad input and full accountability.

4. Creates only a single, independent Institute of Health Care Finance and Policy to replace the existing Division of Health Care Finance and Policy and provide independent oversight and accountability. The current bill increases bureaucracy and costs by creating two new entities (the Institute for Health Care Finance and Policy and the Health Care Quality and Finance Authority), along with several new boards and commissions. Also subjects those involved with the new Institute to be subject to conflict of interest laws.

5. Imposes strict unification and auditing procedures to prevent the payment of costs for ineligible claimants (such as those who aren’t Massachusetts residents), unnecessary claims and duplicate claims. A recent report by Inspector General Gregory Sullivan identified the significant nature of these costs as follows:

• $7 million spent on people who do not live in Massachusetts;
• $6 million for reimbursing hospitals and clinics for 13,000 duplicate claims;
• $15.1 million for more than 60,000 “medically unnecessary” claims; and
• $2.7 million for “medically unlikely” claims

6. Addresses the costs of long-term care by requiring a state-wide master plan of facilities and resources to ensure that this type of care can be provided in cost-effective settings that maximize health outcomes and minimize costs.

7. Prevents additional mandates from being imposed without legislative approval.

8. Authorizes the use of prescription drug discount coupons, rebates and product vouchers as tools to help consumers cope with the high cost of prescription drugs.

9. Establishes a wellness grant program which is subject to appropriation from available state revenues and other charitable sources, rather than siphoning needed funds from the state’s health care system, and minimizes the administrative costs of the program.

To read the actual text of S.2260 and all the accompanying amendments please click here. The Senate is scheduled to begin today’s began at 10 a.m. and can be viewed live by clicking here.