Mass. Proposes Plan to Cut Acute Healthcare Costs

May 8, 2012
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Posted in CorporateHealthcare Policy & The MediaKnowledge & MedicinePolitics & The Law

Posted in CorporateHealthcare Policy & The MediaKnowledge & MedicinePolitics & The Law

Massachusetts state lawmakers have introduced a bill that would link healthcare spending to economic growth. Dubbed the Health Care Quality Improvement and Cost Reduction Act of 2012, the bill, if passed, would tie hospital and provider payments for services to the Gross State Product, less 0.5 percent. The measure is meant to keep spending by certain high-cost institutions in check, requiring taxation if the capped spending mechanism is exceeded.

A tax rate of 10 percent would be levied against hospitals which could not justify spending at a level of 20 percent or lower on the median price for a particular service. Raised funds would be used for indigent care spending. While not a requirement, ACO membership would be encouraged, as the bill would allow greater transparency for healthcare consumers. Greater consumer awareness would lead to greater adoption of coordinated care programs between hospitals and ambulatory primary care delivery systems.

To a leading MIT healthcare economist, Obama adviser, and Mass. universal coverage architect, the plan is described as “broad” and ”visionary”, a complement to rein in higher costs under that state’s universal coverage mechanism.