3 lessons to learn from Massachusetts' new healthcare law

According to the authors of a new analysis published Wednesday in Health Affairs, there are three overlying lessons for state and federal healthcare policy makers to be learned from Massachusett's healthcare law experiences.

The Health Affairs analysis comes on the heels of the recent healthcare cost control bill passed by Massachusetts legislature on Aug. 8. The legislation is the state’s third major effort to address health cost containment since its landmark 2006 health insurance coverage reform law was passed, and it sets annual state spending targets, encourages the formation of accountable care organizations and establishes an independent commission to oversee healthcare system performance.

[Also: Massachusetts health cost control bill passes]

According to Robert Mechanic, analysis co-author and executive director of the Health Industry Forum, there are three lessons to be learned from Massachusetts' new legislation.

The first is that implementing near-universal coverage, as passed by Massachusetts legislature in 2006 and planned under the Affordable Care Act (ACA) for 2014, will increase pressure on government to begin controlling overall healthcare spending.

“Once Massachusetts passed the universal coverage, it got everyone serious about costs. It’s often questioned - do you focus on costs or coverage first?” said Mechanic. “Once you take the step of covering everyone, there’s a shift in politics to focus on controlling costs. In 2014, a majority of people will be covered, and I think this same issue will occur - a shift in focus in how we develop cost control.”

[Also: Massachusetts doctors support continuation of health reform law]

The second of the lessons mentioned in the analysis is that cost control measures have to occur gradually, said Mechanic. He added that in Massachusetts, the laws were enacted incrementally in order to increase the state’s ability to influence healthcare spending.

“First there has to be an investment in understanding healthcare spending trends, then putting control on premiums,” he said. “ The third thing is setting statewide targets that create structure for managing statewide spending controls.”

Lastly, the effectiveness of new cost control laws will all depend on changes in providers’ and insurers’ behavior. Mechanic added that within the state, the private market activity has had a complementary impact on the pace of the healthcare system change. Massachusetts has also put emphasis on expanding the use of global payment, an approach in which medical groups provide healthcare to defined enrollee populations under prespecified budgets.

Overall, Mechanic and his analysis co-authors, Stuart Altman and John McDonough, said that “although the 2012 law lacks strong mechanisms to enforce the new spending goals, it creates a framework for increased regulation if spending trends fail to moderate,” according to the report.

[Also: Massachusetts AG report criticizes healthcare cost disparities]