Governor Charlie Baker filed health care legislation on March 15, called “An Act Investing in the Future of Our Health,” that proposes changes behavioral health, cost management and access to care. The bill that revisits reforms he proposed in 2019, then called “An Act to improve health care by investing in Value,” which received a public hearing in January 2020. Neither the State House or Senate took further action.
While the healthcare system in Massachusetts ranks best in the United States, families in Massachusetts pay around $21,000 per year in healthcare costs, about 30% of middle-class earnings. Relieving that cost burden requires national reform. Across the United States, per capita healthcare costs are nearly $12,000 annually, over 60 percent higher than the second most expensive country in the world.
Despite those high costs, many studies rank the American system poorly when compared to other wealthy nations. A 2021 study by the Commonwealth Fund, a foundation that advocates for access to high-performing health care, ranked the United States healthcare system last in a comparison of eleven wealthy countries. Of the eleven countries analyzed in the report, only the United States has a system that does not incorporate a single payer model or a tiered model with a single payer component.
When the World Health Organization last ranked the healthcare systems in 190 countries (.pdf) in 2000, it ranked the systems in 36 countries higher than the U.S.
Last month, the Congressional Budget Office (CBO), the non-partisan research arm of U.S. Congress, released its first report since December 2020 on single payer healthcare systems. Its latest report analyzes “the economic and distributional implications of five illustrative single-payer health care systems.”
Baker’s 2020 Health Care Reform Proposal
Governor Baker’s bill focuses on three areas of of the Massachusetts healthcare system.
- Prioritizing Primary Care and Behavioral Health
- Managing Factors that Increase Costs for Families
- Improving Access to High-Quality Care
“The bill we are filing today would increase access to behavioral care and other services that keep people healthier in the long-term by increasing investment in these areas. It would also control the factors that increase costs for residents and families, and improve access to high-quality, coordinated care. We know our partners in the Legislature agree on the need to address these challenges and look forward to working with them to enact these meaningful reforms.”
– Governor Charlie Baker
Primary Care and Behavioral Health
The primary care ad behavioral health provisions of the bill require an increase of 30% of spending by healthcare providers to primary care and behavioral health over a three-year period, while maintaining current benchmarks for cost growth. Baker’s office said the result would be a “substantial rebalancing of funds equal to a system-wide investment of approximately $1.4 billion into primary care and behavioral health, and improve front door access to services.”
Managing Costs
The cost control measures establish a default payment rate of reimbursement that insurance carriers must pay out-of-network care providers. Baker’s office says this “effectively removing the patient from the payment dispute.”
The other cost control measures include holding high-cost drug manufacturers to the same standards as high-cost providers and small group rate reforms Baker claims will lead to increased access to coverage options.
Improving Access
Baker’s office highlighted improvements to scope of practice standards and other licensure requirements, Massachusetts entering the Interstate Medical Licensure Compact to streamline and the Center for Health Information Analysis studying the healthcare workforce as ways to increase access.
Congressional Budget Office Releases Single-Payer Analysis
The Congressional Budget Office released a report titled, “Economic Effects of Five Illustrative Single-Payer Health Care Systems” on February 23. The summary notes six channels it analyzed through which a single-payer system would affect the economy:
- The composition of workers’ labor compensation would change because employers would no longer provide health care benefits and would pass along the savings to employees, increasing their taxable wages.
- Households’ health insurance premiums would be eliminated, and their out-of-pocket (OOP) health care costs would decline.
- Administrative expenses in the health care sector would decline, freeing up productive resources for other sectors and ultimately increasing economy-wide productivity.
- Reduced payment rates to providers would increase productivity and efficiency in providing health care; however, some of the reduction in payment rates would be passed through to workers’ wages in the health care sector and throughout the supply chain.
- Longevity and labor productivity would increase as people’s health outcomes improved.
- Long-term services and supports benefits would further reduce out of pocket spending, provide payments for care that is currently unpaid, increase wages among workers providing care, and allow some unpaid caregivers to increase their hours worked at their primary occupation.
