Massachusetts passes landmark bill to tackle health spending

On Tuesday, the Massachusetts state legislature passed a first-of-its-kind bill aimed at slowing the growth of health care spending (Source: "Massachusetts Aims to Cut Growth of Its Health Costs," New York Times, July 31, 2012).

The bill, which Democratic Gov. Deval Patrick said would show other states how to “crack the code on costs,” sets a goal for health care spending to grow no faster than the state's economy through 2017, and then a half-percentage point lower than the state's gross domestic product for the following five years. Since passing a health reform bill in 2006 that became the model for the Affordable Care Act, health spending in Massachusetts has increased 6 percent to 7 percent a year, compared to state GDP growth of less than 4 percent. 

According to a summary of the bill (pdf, 4 pages), a Health Policy Commission will be formed to monitor growth in health spending and enforce spending targets, although the bill contains no real penalty for missing the targets.

The bill includes a number of strategies aimed at curbing spending growth, including requiring the state Medicaid program to adopt new payment methodologies, dedicating $60 million collected from insurers to prevention programs and encouraging the creation of accountable care organizations.