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Massachusetts wants to cut $150 billion in health costs. Can it succeed?

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Massachusetts is inching toward health-care legislation that, if successful, could overhaul how the state pays for health care — and save billions in the process. iStockphoto

Both the Massachusetts Senate and House have released bills that aim to cut at least $150 billion in health-care costs over the next 15 years. They do so by setting a global cap on health-care spending, under which health-care providers get paid for the quality — rather than quantity — of medicine they provide.

As for making sure those bills make it across the finish line and become law? That task lies, in no small part, with Massachusetts state Sen. Richard Moore. As chairman of the Massachusetts legislature’s Committee on Health Care Financing, he’s been at work on health cost control legislation for 15 months — and will be the guy negotiating what the final product looks like.

“It hasn’t been all harmony and light, but everybody seems to feel we need to move in the same direction,” Moore told me in an interview this week. “There’s the general agreement that, if we focus on getting the best quality, we can drive down cost and ensure access for everybody.”

But there are some differences of opinion among Massachusetts legislators that could become roadblocks, namely determining how aggressive the state ought to be in slowing health-care cost growth.

The House has proposed capping health-care cost growth slightly lower than the rest of the economy, while the Senate would go allow costs to rise just faster than Gross State Product. Moore, for his part, is open to a more restrictive cap albeit not as tight as the Massachusetts House proposal.

“I’d love to get below inflation,” he says, “But we’re just concerned that might be too drastic. That’s almost like cutting the average rates of the past few years increases in half. We think the House version moves in that direction too quickly.”

There are also questions of enforcement: If Massachusetts does cap its health-care spending, how can it make sure that health-care providers will stay within the budget? Both bills will have a state agency watch over the process, with authority to write a “corrective action plan” if it didn’t see costs moving in the right direction.

I asked Moore whether such an agency would have enough teeth to enforce steep spending cuts. “We didn’t want to hold the hammer all the way out there,” he explains. “I think the folks in health care understand this is their job, so you might not need the hammer. And we will have someone watching, with the authority to require work plans. Maybe they’ll come back to us and eventually ask for more authority.

“We view this as a step in the right direction but not necessarily the end solution.”

What Moore says he is committed to is ensuring that a bill moves this session, regardless of any obstacles that come up in ensuing weeks and months.

“There’s general agreement this has got to be the direction of health care,” he says. “I have been working on this for 15 months. You work on something for that long, with so many people, maybe it’s not surprising that there’s a lot of agreement.”

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