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Should California Follow Mass. Cost-Control Example?

Massachusetts established a new law this month designed to rein in health care costs.

Considered by many as the second legislative step in health care reform, the law is supposed to allow health spending to grow no faster than the state economy over the next five years. After 2017, health spending would slow to half a percentage point below the economy’s growth rate for five years.

Massachusetts state officials predict the law, which includes other cost-saving provisions, could save their state as much as $200 billion over the next 15 years.

The law establishes a commission to monitor spending and require that health care providers and insurers justify increases above target rates. The commission can require insurers and providers to submit a plan to bring spending back in line. The commission can impose fines up to $500,000.

A proposed “luxury tax” on high-priced medical providers included in earlier versions of the bill was removed in the final draft.

We asked legislators, state officials, trade associations and consumer advocates: Should California be thinking about a similar law?

We got responses from:

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