Massachusetts Governor Deval Patrick has unveiled legislation to rein in spiraling insurance costs by setting boundaries on the healthcare market.   The move to slow soaring costs in Massachusetts has strengthened since the state passed its ground-breaking 2006 MassHealth law that now insures approximately 98 percent of residents.  Although the law significantly expanded coverage, it did little to curb rising costs that are now putting pressure on the state budget and family finances.  Patrick told the Greater Boston Chamber of Commerce that Massachusetts led the way in expanding health coverage and is now “poised to lead again on health cost containment.”  The plan will move Massachusetts toward a “global payment” system where physicians are rewarded according to their patients’ health, rather than by the number of procedures or office visits they schedule.

“We have an expensive system that doesn’t provide the best care for patients and that has to change,” Patrick said. “Universal health care in Massachusetts has been a resounding success, and rightly serves as a model for what’s possible for the rest of the nation, but it costs too much.  “Healthcare in Massachusetts is now universally accessible but it is not universally affordable,” according to Patrick.

Critics of Massachusetts’ healthcare system say MassHealth currently includes incentives that increase physician and hospital compensation based on the number of procedures or tests they perform.  Under Patrick’s new proposal, a primary-care physician will be compensated for treating a patient’s overall health.  Some Massachusetts healthcare providers are already moving in that direction.  Blue Cross Blue Shield of Massachusetts and physicians at Beth Israel Deaconess Medical Center in Boston signed an “alternative quality contract” to cut costs by paying doctors and hospitals for the quality — not the quantity — of the care they provide.

Patrick’s proposal would establish a more formal structure, including the creation of a new healthcare council made up of leading public health officials to act as a central clearinghouse.  The council’s goal is to pressure the market.  Although it won’t have the power to directly set prices, it will try to establish boundaries for the market.

Not everyone in the Bay State likes Governor Patrick’s proposal.  Writing in the Boston Business Journal, Julie Donnelly says that “The bill would require those who cannot afford private health coverage or do not have the option of enrolling their child in a private plan to reimburse the state up to eight percent of their gross income for the cost of that dependent child’s health coverage under Medicaid.” According to Donnelly, “The proposed revisions to the healthcare law would hit low-income, working divorced fathers who pay child support but cannot afford health insurance.  The bill also hurts kids who are low income and live with a single parent.”