Massachusetts passed a massive medical cost control bill in 2012, a “Hail Mary” effort to make health-care more affordable in the nation’s most expensive medical market. The problems of the Massachusetts’ law offer invaluable lessons for the nation’s health-care struggles.
Driven in part by a Boston Globe investigation that exposed the likely collusion of the Partners Healthcare hospital system (including several Harvard Medical School teaching hospitals) with Blue Cross/Blue Shield, the largest healthcare insurer in the state, the law marked the biggest health reform since Romneycare in 2006. While most agree Massachusetts needed cost controls, there’s no evidence that the 2012 law has accomplished its goal—and these same failed policies have been folded into the national Affordable Care Act.
Romneycare, Massachusetts’ universal health-care law, already lacked effective rules to control the rapid growth of state medical costs. That, paired with the Boston Globe’s exposure of the likely collusion between Partners Healthcare, the largest hospital system in New England, and Blue Cross Blue Shield to raise health care payments to hospitals and doctors by as much as 75 percent, led to passage of a hefty, 349-page cost-control law in 2012. The legislation included a dizzying number of committees, an uncoordinated “cost containment” process, and dubious quality-of-care policies, like “pay-for-performance,” a program that pays doctors bonuses for meeting certain quality standards, like measuring blood pressure. These incentives might make sense in economic theory, but have failed repeatedly in well controlled studies. They’ve even created perverse enticements, such as some doctors avoiding sicker patients. The cost control law also encouraged widespread use of expensive electronic health records, even though there’s no evidence that they save any money.
