By Jane Norman, CQ HealthBeat Associate Editor
August 17, 2009 – A study by the Rand Corp. found that the most promising approach for curbing rising health care costs in Massachusetts is to change the way in which payments are made for health care services, moving to methods such as bundled payments.
Christine E. Eibner, a co-author of the study, said in a presentation Monday that the conclusions could have implications for the national debate over a health overhaul. Some of the concepts implemented in Massachusetts, such as a mandate that all individuals be insured, are included in legislation moving through Congress.
Landmark legislation was approved in 2006 in Massachusetts revamping the health care system. By 2008, just 2.6 percent of Massachusetts residents lacked health insurance, compared with a national average of 15 percent. But continued cost increases threaten the viability of the initiative, says the study, which has been submitted to Massachusetts health officials.
Without policy changes, health care spending in Massachusetts is projected to nearly double to $123 billion by 2020 and finding a way to trim costs is a major issue, the study says. The Massachusetts Division of Health Care Finance and Policy contracted with Rand to suggest paths to savings.
The study says there are no "silver bullets" for cutting spending growth, but there are four top options. They included bundled payments, in which payment is made per patient episode rather than for each service; rate regulation for the many academic medical centers in Massachusetts; elimination of payment for adverse hospital events; and hospital all payer rate setting, in which a regulatory board would set prices. Also promising is adoption of health information technology and expansion of primary care, the study says.