Saying Massachusetts has become the first state to “crack the code” on soaring health care expenses, Gov. Deval Patrick signed cost-control legislation this week that is estimated to save $200 billion over the next 15 years.
The new law holds the annual increase in total health care spending to the rate of growth of the state’s Gross State Product (GSP) for the first five years, through 2017 and then even lower for the next five years, to half a percentage point below the economic growth rate.
“Today, we take our next big step forward,” Patrick said during a well-attended State House ceremony packed with medical, business and labor leaders, caregivers and patient advocates, and legislators and policy makers. “Massachusetts has been a model to the nation for access to health care. Today we become the first to crack the code on cost. And we have come this far together.”
The new law is considered to be the second phase of the initial health care reform legislation signed into law in 2006 by then-Gov. Mitt Romney. That first phase is responsible for expanding coverage to over 98 percent of state residents, including 99.8 percent of the state’s children.
In addition, Patrick administration officials claim that over the last two years, small businesses and working families have saved over $600 million as a result of their reducing the average annual increase in health insurance premiums from over 16 percent to less than 1 percent.
By most accounts, the state health care reforms are working. As Patrick Administration officials are quick to point out, over 90 percent of Massachusetts’ residents have a primary care physician and four out of five have seen their doctor in the last 12 months.
Seventy-eight percent of businesses in the state now offer health insurance to their employees, compared to the national average of about 69 percent.
“What we’re really doing is moving toward a focus on health outcomes, and a system to reward that,” Patrick said. “We are ushering in the end of fee-for-service care in Massachusetts in favor of better care at lower cost.”
Under the new law, workers are expected to see an additional $10,000 in take-home pay over the next five years while the average family will see an estimated savings of $40,000 on their health care premiums over the same time period.
“Today, we take another big step forward towards achieving affordable health care for all of our residents,” said Secretary of Health and Human Services Dr. JudyAnn Bigby. “We are moving towards a health care system that is more focused on better care and better health at lower cost.”
Part of the new reforms increases transparency by giving consumers better information about the price of procedures and health care services. The law requires health insurers to provide a toll-free number and website that enables consumers to request and obtain price information.
“The passage of today’s bill is all about seeing our health care system through the eyes of the patient,” said Representative Steven M. Walsh, House Chair of the Joint Committee on Health Care Financing. “We have the highest quality medical system in the nation and the highest percentage of health care coverage, yet it is a struggle for families to afford their health insurance premiums.
“This legislation,” Walsh explained, “focuses on increasing efficiency and cutting costs within our system, while enhancing the quality of care that our patients receive and empowering them to make the best personal health decisions.”
