House approves health care cost containment bill

BOSTON -- The Legislature moved a step closer to a dramatic overhaul of the state’s health care system on Tuesday when the House approved a bill aimed at reining in health care costs by altering the system to reward quality over quantity of care.

The House voted 148-7 Tuesday night to approve a bill Democratic leaders say will trim $160 million from health care costs over the next 15 years by setting a cost growth target and encouraging providers and insurers to adopt alternative payment and care delivery models.

The seven votes against the bill all came from freshman Republicans, including Reps. Paul Adams, Richard Bastien, Ryan Fattman, Kevin Kuros, Steven Levy, Marc Lombardo and Jim Lyons.

If resolved before the end of formal sessions in July, the cost containment bill that has drawn national attention and has been identified by Gov. Deval Patrick as his top priority could become a signature issue for members of the Legislature and their opponents heading into campaign season.

The overwhelmingly supportive vote came after just one day of debate on the complex piece of legislation when the House moved swiftly through 275 amendments filed by members, adopting dozens with little or no debate.

House Speaker Robert DeLeo, who presided over the final vote, congratulated Rep. Steven Walsh, the Lynn Democrat and lead author of the bill, and all members of the House for what he called “a spectacular job on a very difficult matter.”

Walsh, who has spent the better part of the last year working on the bill, told his colleagues that the bill would help contain cost without pushing the industry to change so fast that it hurt one of the largest employment sectors in the state.

Citing health care cost growth levels that are far exceeding economic growth and devouring funds that might be spent on education or public safety, Walsh said greater disclosure and pricing transparency requirements in the bill would put consumers "in the driver’s seat."

Walsh also tried to discredit unnamed "talking heads" who he said claim the health care sector is working well, citing a recent Price Waterhouse Cooper report estimating health care costs in Massachusetts are expected to grow at 7.5 percent while the state’s economy will grow at only 2.4 percent.

"The market is most certainly not working. The market is absolutely broken," Walsh said.

Massachusetts Taxpayers Foundation President Michael Widmer last week called the House bill "seriously flawed." Noting that price caps and rate regulation "that have a long record of failure" and will place new costs on the system, Widmer said, "The House bill is a setback for health care consumers, the health care industry, and the future of the Massachusetts economy."

The Massachusetts Hospital Association has also warned about the impact on jobs if lawmakers push too fast to squeeze savings out of the system, and critics such as the Pioneer Institute have warned the bill is based on unrealistic savings estimates and would create a new, complicated bureaucracy to oversee the new system.

In addition to encouraging provider and insurers to adopt to payment models, the bill includes a nearly $200 million, one-time assessment on large providers and insurers to be redistributed to struggling community hospitals, and proposes to tax high-cost hospitals whose price variations from lower-cost providers can’t be justified.

A move to expand the excise tax on cigarettes to other tobacco products, including smokeless products, failed when Democratic leadership ruled it beyond the scope of a health care cost containment bill.
Rep. Jonathan Hecht, a Watertown Democrat, proposed to expand the state’s excise tax on cigarettes - currently $2.51 per pack - to flavored cigars, chewing tobacco and other forms of smokeless tobacco, which he said have been target toward youth, and use the revenue to fund a Prevention and Wellness Trust. Though Hecht’s amendment was co-sponsored by 51 House members, lawmakers did not get a chance to vote on the amendment.

Knowing her amendment to lift the sales tax exemption on soda faced a similar fate, Rep. Kay Khan withdrew her amendment as well.

The final action in the House sets up negotiations with the Senate, who last month passed a cost containment bill with similar objectives, but divergent from the House’s plan in several key areas. Senate President Therese Murray has indicted she has no interest in the House’s proposed luxury tax on high cost providers, and the Senate bill proposed to charge health plans $40 million a year to pay for a transition to electronic medical records and prevention and wellness programs.

Some of the most spirited debate on the bill came at the end of the night when Rep. Daniel Winslow (R-Norfolk) offered an amendment that would have required health plans to offer a new basic health plan without all of the current coverage mandates required.

Winslow said that the cost containment bill would only limit cost growth, but would do nothing to reduce the cost of health care. Comparing the Massachusetts health insurance system to a pizza, Winslow said consumers are currently required by the state to order their pizza with pepperoni and anchovies when all they might want or need is plain cheese.

“Please give us plain cheese pizza, Mr. Speaker,” Winslow said.

Rep. Paul Frost (R-Auburn) also turned to analogies to make a point in favor of Winslow’s amendment, arguing lawmakers over the past six years have layered on mandates requiring consumers to purchase a Cadillac rather than a Chevrolet. “If you’re going to tell people they have to buy insurance, then let them buy affordable insurance that fits their needs rather than tell them what they need,” Frost said.

Rep. Thomas Conroy (D-Wayland) warned that Winslow’s plan could lead to a slow erosion of benefits, complicating the marketplace and confusing consumers while undoing the well-thought out decisions of past Legislatures. Rep. Walsh also took offense to the suggestion that the bill, and the amendment accepted Tuesday, ignored the plight of families and small businesses.

The amendment failed 34-119.

The House did adopt an amendment offered by Rep. Martin Walsh (D-Boston) requiring accountable care organizations to serve children with specialty care needs.

Another amendment offered by Rep. Linda Dorcena Forry passed unanimously that would allow small businesses to reduce their “fair share” assessments by not counting employees who already have qualifying insurance coverage from a spouse, parent, veterans’ plan, Medicare, Medicaid, or a plan tied to disability or retirement against their head count for required employee insurance.

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