Massachusetts Gov. Deval Patrick signed a bill Monday that lawmakers hope will rein in health care costs by tying health care cost growth to how fast the state economy grows. But, Moody's said the law could hurt the state's hospital credit ratings since the hospitals' revenue growth would be hampered.
WBUR: Patrick Signs Health Care Cost Containment Bill
A bill that will adjust virtually every piece of the state’s health care system is now law. Gov. Deval Patrick signed the legislation Monday morning in a packed State House hall. "Massachusetts has been a model for access to health care," Patrick reminded the crowd. Now, "we become the first to crack the code on costs." Hundreds of health care leaders joined Patrick Monday to endorse the law… Patrick, who made tackling health care costs a top priority, gave credit to the broad coalition that helped to pass the state’s access law and seems to be holding together to lower costs (Bebinger, 8/6).
Boston Globe: Governor Deval Patrick Signs Health Cost-Control Bill
The first-in-the nation legislation is considered the second phase of the groundbreaking universal health care law that was signed by Governor Mitt Romney in 2006. The new law allows health spending to grow no faster than the state’s economy through 2017. For five years after that, spending would slow further, to half a percentage point below the growth of the economy, although leaders would have the power under certain circumstances to soften that target. The bill also includes provisions to encourage a shift to paying hospitals and doctors for overall patient care rather than for every test and treatment (Levenson, 8/6).
Reuters: Massachusetts Health Care Law May Hurt Hospital Ratings-Moody's
Moody's Investors Service said Massachusetts legislation aimed at curbing health care costs, to be signed into law on Monday, may put a strain on hospitals' credit ratings because it will hamper their revenue growth. Lawmakers passed the legislation last week, making Massachusetts the first state in the nation to curb how much providers and insurers can spend on medical care, and putting the state on course to save up to $200 billion over 15 years. The law will limit revenue growth and reduce operating flexibility for hospitals in the state, Moody's said (8/6).