Health leaders seek to change payment system
Urge state to look at link between hospitals, insurers
To control soaring healthcare costs in Massachusetts, the state needs to overhaul how doctors and hospitals are paid, several healthcare leaders said yesterday during legislative testimony.
Last week Senate President Therese Murray proposed dozens of ways to cut costs, including an end to payments for botched treatment and increasing payments for demonstrated improvements in care. But yesterday two former chairmen of the Legislature's healthcare committee said those changes don't go far enough.
"The big bogeyman . . . is payment system reform," said Senator Mark Montigny, a New Bedford Democrat, at a hearing on Murray's bill and another proposed by health insurers. The state needs to take on "the cozy relationship" between the state's largest hospital system, Partners HealthCare, and its largest insurer, Blue Cross-Blue Shield, Montigny said.
John McDonough, executive director of Health Care for All and a former House healthcare committee chairman, said large healthcare providers, particularly hospitals, have driven up the costs through secret negotiations with insurers. He proposed that the state seek federal approval to impose a system in which payments would be made based on the service provided and not on who was shelling out the money or how much clout the provider had.
Spending on healthcare in Massachusetts grew 33 percent between 2002 and 2006, to $62.1 billion, Murray said yesterday, urging the joint Committee on Health Care Financing to support her bill. "We cannot afford to stand by and let this continue."
Murray's bill also contains a ban on drug company gifts to doctors, a requirement that doctors and hospitals switch to computerized records by 2015, and public hearings on any insurance company proposal to raise rates for any group of people by more than 7 percent a year.
Dr. Lucian Leape, a Harvard specialist on medical safety, said a much larger infusion of money is needed for the switch to computerized records than the $25 million a year proposed by Murray. Cost estimates top $500 million, and the state should tax insurance companies to pay that upfront price because they will get most of the savings, he said.
Jon Kingsdale, executive director of the Commonwealth Health Insurance Connector, said the state should require all insurers to explain price increases, not just those more than 7 percent. The Massachusetts Association of Health Plans, which represents most of the state's insurers, agreed.
Lawmakers also heard opposition to some provisions of the bill. A trade group representing pharmaceutical companies said the proposed ban on gifts to doctors could hurt patients by eliminating some company-funded research grants to doctors for medical experiments. The Massachusetts Medical Society, which represents doctors, said the ban could also limit support for continuing medical education programs that help doctors keep up with new research and treatments.
