Healthcare cost control efforts in Massachusetts getting mixed reviews

Although opinions differ as to whether the Massachusetts health law marks a harbinger of good news or bad for the rest of the country, cost control remains a common theme of two recent editorials.

David E. Williams, co-founder of MedPharma Partners LLC and author of the Health Business Blog, says that the Bay State's recent difficulties, such as patients gaming the system and insurers suing over rate caps can be viewed in terms of positive ways the state has quickly stepped in to control costs.

Regarding the state's push to cap premium increases, for instance, Williams writes, "For a long while, health plans in Massachusetts and elsewhere have mainly just passed along cost increases. They haven't been terribly effective at holding costs down, and in fact with the backlash against managed care, their employer customers haven't really pushed that hard." Similarly, Williams notes that replacing fee-for-service payments with global capitation may not be such a bad thing, as significant state intervention may force health plans to get serious about managing utilization.

On the other hand, James C. Capretta, Fellow of the Ethics and Public Policy Center, noted in a Kaiser Health News editorial that after three years of near-universal healthcare in Massachusetts, no real progress has been made on rising costs, with the state climbing higher over budget as residents struggle to keep up with rising premiums.

To address the crisis, Capretta also foresees the state, and ultimately the Obama administration, implementing heavy-handed cost controls. "Such controls, however, do not make healthcare delivery more efficient," Capretta says. "They cut costs only by driving out willing suppliers of services. In other words, it's cost control through restricted access to care."

To learn more:
- read this post in the Health Business Blog
- here's the editorial in Kaiser Health News