Calls for caps of medical costs increasing

The Health Policy Commission, Massachusetts' health cost watchdog, is calling on state lawmakers to establish price caps for the highest-priced providers, Bloomberg reported Sept. 13. 

Massachusetts would become one of a growing number of states, including California and Rhode Island, that have started imposing caps on certain healthcare prices. 

The Health Policy Commission's proposal recommends capping specific prices of services paid by commercial health insurers, which can pay as much as triple Medicare pays, according to the report. It also recommends capping price growth. The state's latest data on price variation shows the same procedure at one hospital can be nearly double the cost at another.    

Leemore Dafny, PhD, an economist at Boston-based Harvard Business School, told Bloomberg, "The free market plus careful oversight hasn’t gotten us to the outcomes that we feel we ought to deliver to our population. 

"I’m a business school professor who is saying, 'Hey, the prices are wrong. They aren’t being fixed. This is when you come in and help the market.'"

Hospitals argue, however, that capping costs is especially difficult during a time of inflation, labor shortages and heightened patient needs, according to the report. Scott Sperling, chairman of Boston-based Mass General Brigham, said the health system does not have full control over all those expenses. 

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