Three years ago, Massachusetts enacted perhaps the boldest state health care experiment in American history, bringing near-universal coverage to the commonwealth with Paul Revere speed.
To make it happen, Democratic lawmakers and Gov. Mitt Romney, a Republican, made an expedient choice, deferring until another day any serious effort to control the state’s runaway health costs.
The day of reckoning has arrived. Threatened first by rapid early enrollment in its new subsidized insurance program and now by a withering economy, the state’s pioneering overhaul has entered a second, more challenging phase.
Thanks to new taxes and fees imposed last year, the health plan’s jittery finances have stabilized for the moment. But government and industry officials agree that the plan will not be sustainable over the next 5 to 10 years if they do not take significant steps to arrest the growth of health spending.
With Washington watching, the state’s leaders are again blazing new trails. Both Gov. Deval Patrick, Mr. Romney’s Democratic successor, and a high-level state commission have set out to revamp the way public and private insurers reimburse physicians and hospitals.
They want a new payment method that rewards prevention and the effective control of chronic disease, instead of the current system, which pays according to the quantity of care provided. By late spring, the commission is expected to recommend such a system to the legislature.
If Massachusetts becomes the first state to make this conversion, health policy experts argue that it would be as audacious an achievement as universal coverage. The state faces several hurdles, including securing federal permission to impose the changes on Medicaid, a shared state and federal program, and more unusually on Medicare, which is financed entirely by Washington.
Those who led the 2006 effort said it would not have been feasible to enact universal coverage if the legislation had required heavy cost controls. The very stakeholders who were coaxed into the tent — doctors, hospitals, insurers and consumer groups — would probably have been driven into opposition by efforts to reduce their revenues and constrain their medical practices, they said.