MA Healthcare Cost Containment Law Comes with Teeth
Moreover, Moody's also expects new reimbursement models, such as bundled payments and shared savings, will reduce Massachusetts hospital revenues. "The state will also likely incentivize the creation of additional accountable care organizations (ACOs), a loosely defined concept that involves a hospital managing the health for a set group of people. Hospitals unable to swiftly adapt to the new models will likely lose revenues. Given that payment models have not yet been defined, it is too early to estimate the revenue impact," Moody's wrote.
S 2400 isn't all bad for large providers, though. It seeks to control medical malpractice costs by creating a 182-day "cooling off" period. This is supposed to give both sides a chance to negotiate a settlement.
Though Massachusetts may have been the first state to climb aboard the health insurance reform bandwagon, its success has been mixed. For while an estimated 95% of the state's population is insured, the healthcare costs have also risen 6% annually.
"There wasn't anything in the initial Massachusetts reform [legislation] to 'restrain' or bend the cost curve. It really was about universal coverage," says Sadowski. "The pursuit [of universal coverage] is not the solution, [but] rather the first step. Now we have universal coverage and we need to figure out how to constrain costs. So as I look at this law and at healthcare reform elsewhere in the country I think there is still a long, arduous journey ahead for all."
Financial leaders should keep a close watch on how this law plays out at reducing costs. If it proves successful, it may become the model that other state legislatures adopt in the coming years.
Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
- Interventional Radiology No Longer a Sub-Specialty
- CEO Exchange: Preparing for Population Health
- Advocate, NorthShore Deal Would Create 16-Hospital System
- Top Reason for Nurse Turnover: Managers
- CEO Exchange: Pressure is On to Partner, Drive Quality
- House OKs Cassidy's 'keep your plan' bill
- How MA plans to re-enroll 450,000 residents in health insurance
- Power of price: In South FL and the nation, healthcare costs often are shrouded in secrecy
- 3 Strategies for Retaining Millennial Employees
- Behind the CVS Health Rebranding Strategy