Health Care Cost Management in Massachusetts:

A Discussion of Options
Sponsored by: Partners Healthcare, Blue Cross Blue Shield of Massachusetts and the Greater Boston Chamber of Commerce

Health Care Cost Management In Massachusetts

A Meeting Series Organized by the Heller School for Social Policy and Management

There is widespread concern over the rapid growth in health care spending. This issue has special significance in Massachusetts because universal coverage as envisioned in the state’s historic health reform plan depends on the availability of affordable health insurance products. If history is any guide, reducing the rate of health spending growth will be challenging. Progress will require a shared commitment from medical professionals, health plans, consumers, business and government. This meeting series brings leading researchers and practitioners together to discuss the published evidence on alternative cost control strategies and the implications for public policy in Massachusetts.

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For more information contact Ann Cummings
(781) 736-3804

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Meeting Schedule  (Click below for details)

Meeting #1

Overview of Cost Management Options

November 27, 2007

Over the past forty years health care spending has consistently grown faster than the U.S. economy. Despite cost containment efforts ranging from regulation in the 1970s, to competition in the 1980s and managed care in the 1990s, spending growth has always bounced back. At current spending levels, the question no longer is whether spending should be controlled, but how. Unfettered adoption of expensive medical technology has driven U.S. health spending well beyond that of other nations. Medicare and Medicaid spending is rising dramatically, but provider payments are being limited. The private market cannot indefinitely cross-subsidize providers as public payments fall further below the costs of care. There are many possible cost management strategies, but those that will be most effective will encounter strong resistance. Bending the cost trend is difficult and success will require all stakeholders to accept painful choices.


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Meeting #2

Health Care Reimbursement and Purchasing Strategies

December 17, 2007

Health plans and other healthcare purchasers are experimenting with a range of strategies for controlling spending. Empirical research clearly shows that health care providers respond to financial incentives. The Rand Health Insurance Experiment demonstrated that a prepaid group practice could provide care using 28 percent fewer resources than an unrestricted fee-for-service setting with similar patient outcomes. Capitation and other risk sharing models lower utilization, although many are concerned that capitation incentives for reduced service use are too strong. Health plans are experimenting with pay-for-performance reimbursement models but evidence about effectiveness is limited. Today’s payment systems remain primarily fee-for-service. One of the biggest current policy challenges will be initiating meaningful payment reform that does not unduly disrupt patient care.


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Meeting #3

Consumer Focused Cost Management Strategies

January 18, 2008

As healthcare spending rises, consumers will inevitably face rising out-of-pocket spending. Some believe that rising costs will spur consumers to shop more carefully for health services, driving increased market efficiencies. Research shows that increased consumer cost sharing reduces healthcare spending – but that consumers eliminate both highly valuable and less valuable services equally with potentially adversely health consequences. This meeting will examine a variety of strategies for increasing consumer cost consciousness. It will specifically examine the concept of value based insurance design where consumer cost sharing is reduced or eliminated for highly valuable or cost-effective services.


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Meeting #4

Delivery System Strategies

February 12, 2008

Controlling healthcare spending growth will ultimately require substantial changes in the process of health care delivery. In this meeting we will examine delivery system changes that have taken place in the Geisinger Health System, an integrated delivery system in Central Pennsylvania, and the impact of these changes on current and future cost, quality, and patient safety. We will then discuss strategies for encouraging these types of delivery system innovations in less integrated environments.


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Meeting #5

Employer Cost Management Strategies

March 11, 2008

As the ultimate payers of healthcare expenditures, employers are extremely concerned about rising costs. Health coverage is also an essential benefit for recruiting and retaining skilled workers. Therefore, employers are concerned that any new strategies to control health spending be accepted by their employees. This meeting will examine innovative programs developed by employers to manage the growth in health spending. We will first examine programs adopted by the EMC Corporation of Hopkinton, Massachsuetts. Then we will discuss broader trends in the employer market.


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Meeting #6

Developing a Capacity for Measuring the Comparative Effectiveness of Medical Treatments

April 24, 2008

While the U.S. spends $2.1 trillion annually on health care, the federal government spends relatively little (roughly $30 million) on comparative effectiveness research. Most stakeholders concur that better evidence on the clinical and costs effectiveness of medical treatments can drive improvements in clinical decision making, and could potentially slow the rate of growth in health care spending. This meeting will feature Steven Pearson, M.D., MSc, FRCP, Director of the Institute for Clinical and Economic Review ( Dr. Pearson will discuss key components of comparative effectiveness research and how this research might be used by decision-makers. He will also discuss the status of current federal legislation and steps individual states can take (and have taken) to expand the development and use of comparative effectiveness research.

For additional background, The Health Industry Forum at Brandeis has resources on this topic available at:


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Meeting #7

State Regulatory Strategies

September 5, 2008

During the 1970s and 1980s there were numerous government efforts to control growth in health care expenditures through regulation. The most common approaches were state hospital rate regulation and certificate of need (CON) programs. States subsequently reduced or eliminated many of these programs; however, some are now asking whether strong regulatory approaches should again be considered in light of the persistent growth in health spending. In this meeting, Professor Frank Sloan, Professor of Health Policy and Management and Professor of Economics at Duke University, will present an analysis of the historical performance of state rate setting and CON programs, identify key factors affecting program performance, and discuss policy implications for the future. Stephen Weiner of Mintz, Levin will provide additional perspective, based on his experience as a past Chairman of the Massachusetts Rate Setting Commission.