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Massachusetts health care costs in focus

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August 13, 2012


By: George Sousouris

BOSTON, Massachusetts: The House and Senate have approved legislation that aims to reduce the rate of growth of healthcare spending in the state. The most significant change is an upper limit set on cost growth, which has been set at the increase in gross state product (GSP). The bill is designed to save up to $200 billion.[1][2]

Beyond measures tying cost increases to GSP, the bill also includes $60 million over four years for public health and community based prevention. A new state commission will be set up to monitor health care providers that exceed cost growth targets, which is proving to be a controversial move given the number of world class hospitals in the state. Additionally, insurers will now face a surcharge that will go to funding preventative care programs and smaller hospitals.[3]

While this cost control bill may not receive national headlines, it will be closely watched in public policy circles and think tanks both in and out of state, as it representats Massachusetts' first major foray into significant long term cost reductions in the wake of its landmark healthcare bill passed under Governor Mitt Romney six years ago. Largely cited as the blueprint for the Affordable Care Act, the Massachusetts law instituted an individual mandate for virtually all residents to have insurance or face tax penalties.[3][1][2]

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