Massachusetts seeks to cap growth in health care spending-it’s time to ask HOW

Pending legislation in the Bay State would target the growth in health care spending to the growth in the Gross State Product (similar to national gross domestic product) give or take a little. The average currently is 3.6% annually.

This is a worthy goal, but waving a magic legislative wand does not make things happen. The Affordable Care Act attempts something similar using the Medicare Payment Advisory Board and many people are up in arms over what they see as a potential move toward rationing. Keep in mind that the growth in health care costs is not primarily caused by the increase in individual fees, but the growth in utilization and the type of utilization (more, and more complex, expensive tests).

In addition, providers must deal with reduced payments and new constraints from the federal government. This is especially true for hospitals.

So, to meet preset spending targets what has to happen? The most obviuous is that all providers must reach an optimum level of efficiency. However, beyond that the care that is provided must change. In other words, less care and less intensive care must be provided. If that means that patients receive better care, only necessary care and no more that’s great. On the other hand, in the unlikely event that is achieved but gross spending does not reach the target, then what?

We are back to the fundamental question applicable to all political solutions … how?



Categories: Government, Healthcare

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