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Deval Patrick and Robert DeLeo
Massachusetts Gov. Deval Patrick, shakes hands with House Speaker Robert DeLeo in August after signing a healthcare cost containment bill.
Photo credit: GETTY IMAGES

States work to ease cost burden, improve care

By Modern Healthcare
Posted: December 22, 2012 - 12:01 am ET

Amid the ongoing drama over the survival and implementation of the Patient Protection and Affordable Care Act, state governors and lawmakers pursue initiatives that redraw the ground rules in healthcare. Most changes are intended to reduce the financial burden of healthcare and improve the quality of care.

Oregon, with the help of a $1.9 billion federal grant, creates a network of “coordinated care organizations” in which competing providers and payers voluntarily collaborate under per-member, per-month global budgets. Oregon officials say the experiment could save $11 billion over 10 years.

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  • Massachusetts becomes the first state to enact legislation specifically aimed at reining in the costs of healthcare. The move comes six years after the state established a framework for mandatory health insurance coverage that would become a template for national healthcare reform. The law aims to lower the growth in healthcare costs to half a percentage point below the growth in the state's overall economy. To make it happen, the law establishes spending targets for hospitals, requires providers in state health programs to move toward accountable care models, and exacts $225 million in surcharges on health plans and high-cost hospitals to be redirected to distressed community hospitals, prevention and wellness initiatives, and health information technology.

  • At the urging of Republican Gov. Rick Scott, a former HCA executive, Florida lawmakers require that hospitals operated by 34 public hospital districts evaluate whether they should pursue deals with private health systems. A commission Scott created suggested that the hospitals are more expensive than their private counterparts, adjusting for location and severity of cases.

  • Struggling hospitals in Rhode Island look for buyers but bump up against a law blocking for-profit companies from buying more than one Rhode Island hospital every three years. Gov. Lincoln Chafee expresses reservations but allows legislation to become law that eases the restriction and paves the way for the entry of Boston-based Steward Health Care, which wants to buy Landmark Medical Center in Woonsocket but only with assurances that the company can pursue a larger footprint in the state. Steward ultimately backs out of the deal, and Landmark signs an agreement with Prime Healthcare Services, a for-profit chain based in California.

  • Vermont continues working on its closely watched efforts to fashion the nation's first single-payer healthcare system, building from a 2011 law pushed by Democratic Gov. Pete Shumlin.

  • With backing from hospitals spooked by a 2010 state Supreme Court decision, Illinois enacts a law that compels not-for-profit hospitals to show that the value of charity care they provide and the healthcare burden removed from taxpayers is at least equal to the value of their property-tax exemptions. Another provision allows for-profit hospitals to win tax credits for providing charity care.

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