The Facts on Health Care Payment Reform

Posted on February 23, 2011


Last week Governor Deval Patrick introduced a new bill aimed at tackling the growing costs of health care. As of now, health care accounts for 40 percent of state spending. While other areas of the budget have been flat or declining, health care costs have increased at nearly 8 percent annually in the past three years. If changes are not implemented, by 2016, an average Massachusetts family will spend a third of its income on health care.


Health Care in Massachusetts is now universally accessible,
but how will the bill ensure that it is also universally affordable?


Financial incentives will focus on quality of patient care, not quantity.

  • It will move the industry towards Accountable Care Organizations (ACOs), encouraging integrated networks of doctors, hospitals, and insurance carriers to voluntarily reach agreements that improve health outcomes for patient at lower costs.

  • Its aim will be to reduce fee-for-service payments, and to shift to alternative payment methods. In other words, providers will be reimbursed for healthy outcomes rather than individual appointments and procedures.

  • It sets a goal to narrow the gap in payment differences for similar services.

  • It also ensures transparency to help guarantee that consumers and businesses have reliable information about their health care.

A wider series of criteria will be implemented

  • The criteria will be used to evaluate provider increases and curb costs of “defensive medicine”.

  • The Division of Insurance will have the right to reject premium increases that are inconsistent with the rate of increase in the state’s Gross Domestic Product, or are inconsistent with the region’s medical costs.

  • The Medical Malpractice Reform will reduce the number of costly lawsuits by mandating a 180-day cooling off period after an injured patient signals intent to file litigation, and by making a provider’s apology inadmissible in evidence.

It will leave room for further innovation.

  • It will facilitate and support the use of pilot programs and new ideas to lower the cost of health care.

  • It also creates an advisory council to review progress and ensure that dialogues on solutions are ongoing.


    Let us know your thoughts and opinions! Also, if you want to learn more about the bill? Click here.