Why should an obscure state advisory board make national observers take notice? Because it's a strong indication that Massachusetts is moving towards taking strong action to control health care cost growth.
The board is the "Special Commission on Provider Price Reform," created under last year's chapter 288. The members included representatives of the hospitals, insurers (MAHP and BCBS), physicians, the GIC, and a Kennedy School health economist. No consumer representatives were on the panel. Two administration officials (A and F Secretary Jay Gonzales and DHCFP Commissioners Carrington, and then Boros) co-chaired the group.
Most importantly, the commission also included the House and Senate co-chairs of the Health Care Financing Committee, Rep. Steve Walsh and Sen. Richard Moore. They are leading the effort to draft comprehensive health delivery and payment reform legislation, expected early next year. For the legislators, this was an opportunity for them and their staffs to hear and assess lots of vetted evidence, to confront the various interest group positions on cost control, and find a consensus they could agree to on the trickiest issue, state oversight of provider prices.
Last week the Commission voted in favor of a recommendations that include increased transparency of prices, including a method to allow consumers to figure out in advance what a medical procedure will cost them out of pocket. They also recommended public disclosure of the methodology used to assign providers to tiers in tiered network plans. Both of these are long-time HCFA priorities.
The key recommendation was for a short-term process to empower an independent panel of experts to intervene when insurers reject a price increase proposed by a higher-than-average cost provider. The panel would be authorized to judge if the price increase is justified based solely on the quality of the service. This would remove market power considerations from the negotiation equation. The political leadership decided to push this recommendation through, despite opposition from the Mass Hospital Association.
This recommendation got national attention from policy watchers from the Washington Post's Wonkblog to the American Spectator, and others.
HCFA has long supported state oversight of unreasonable provider prices. Along with GBIO, we have formulated 5 benchmarks for payment reform legislation, which includes this:
- Fair Payment: Effective Public Oversight of Health Care Costs. Unregulated, private market negotiations have failed to produce affordable, fair and equitable payment levels for health care. State government must have authority to require reasonable charges by insurers, hospitals and other medical providers.
We're encouraged by the progress represented by the Special Commission reaching an agreement. The Commission successfully negotiated important policy understandings that represent a real breakthrough in advancing a strong solution to our health care crisis. The dress rehearsal was a success. On to the show - break a leg!