Baker’s plan to reprioritize health spending is running out of time

Passing health care legislation on Beacon Hill is a complicated exercise, as policymakers look for buy-in from an array of stakeholders with sometimes-competing priorities, including patients, different types of providers, public and private insurers, drug companies, and individual legislators with their own concerns.

Gov. Charlie Baker's bid to get his health care reform package onto the books in his last year in office faces another challenge: the short window of time remaining for lawmakers to reach consensus on his multi-pronged bill before formal legislative sessions end for the year on July 31.

"It's almost the end of April. There's an enormous number of things on the plate of the Legislature," Sen. Cindy Friedman, the co-chair of the Health Care Financing Committee, told Baker as her panel held a hearing on his bill. "This bill has really important things in it that I know that we care very, very much about, both the Legislature and the executive branch. If we are limited in what we are able to do, are there things in this bill that you believe are of such high priority that you would say, 'We gotta do this?'"

In broad strokes, the governor's bill (S 2774) aims to inject more resources into behavioral health and primary care, target health care cost drivers and boost access to care.

Baker said the current health care system "rewards those providers that invest in technology and transactional specialty services at the expense of those who choose to invest in primary care, geriatrics, addiction services and behavioral health" and that he is proposing reforms "designed to address the underlying challenges the system faces."

Like legislation he first proposed in 2019 — one of many bills whose path through the legislative process was interrupted by the COVID-19 pandemic — the bill Baker filed in March would require providers and payers to increase their spending on primary care and behavioral health by 30 percent, while still keeping their overall spending growth within targets created under a 2012 cost control law.

It would also penalize drug manufacturers for price increases deemed to be excessive, establish new oversight for pharmacy benefit managers, bring Massachusetts into a multi-state physician licensure compact, and require licensing for urgent care services, among other measures.

Responding to Friedman's question, Baker referred to the need to prioritize investments in primary care and behavioral health. He said that without "flipping the paradigm" on a Medicare fee schedule that has led to less investment in those areas, "there's not a lot else that's going to get us where we need to go, because that fee schedule is just baked into the marrow of everything that goes on in health care generally."

"So for me, that would be the most important element in this from my point of view," he said. "It's probably the hardest to implement, which I apologize for."

Health and Human Services Secretary Marylou Sudders said she "can't pick just one" component of the bill but called its pharmacy provisions "very important" as a way to reduce costs and bolster consumer protection.

The bill's drug cost components have met pushback from the Massachusetts Biotechnology Council and the Pharmaceutical Research and Manufacturers of America. PhRMA has launched a website that knocks the bill as "dangerous," charging that it would "enact government price setting on life-saving medicines and potentially slow the type of innovation patients need."

In a three-page statement opposing drug-related sections of the bill, PhRMA said the biopharmaceutical sector "directly accounts for 72,147 jobs in Massachusetts and supports 216,443 jobs" in the state, and that Baker's bill "could threaten the positive effect that the biopharmaceutical industry has on Massachusetts' economy."

Zach Stanley of MassBio told the committee that seeking to lower the list price of drugs would not necessarily translate into lower consumer spending.

"Drug manufacturers do not control drug formularies or patient out-of-pocket expenses," he said. "Insurance companies do."

Lora Pellegrini of the Massachusetts Association of Health Plans testified in support of the bill's prescription drug cost and transparency provisions, as well as the primary care and behavioral health spending targets and measures protecting consumers from surprise-billing and facility fees.

Health Care for All's Alyssa Vangeli told the committee that the Legislature "now has a number of viable vehicles to rein in rising prescription drug costs," including a pharmaceutical access and accountability bill that the Senate passed in February.

The Senate this session has also passed a separate behavioral health bill, and Speaker Ron Mariano said last month that the House plans to take up its own mental health bill that will "complement and combine with the Senate to broaden the expanse of the mental health changes that we need."

House lawmakers on March 31 agreed to give the Health Care Financing Committee until June 1 to decide whether to advance Baker's bill, an order that still needs approval from the Senate.

Friedman, an Arlington Democrat, said that as lawmakers review the bill, they will be looking to determine "how do we get to those dollars that are going in one place now and really need to go into another, without increasing the total cost of health care."

Her co-chair, Rep. John Lawn of Watertown, pointed to ongoing workforce challenges in health care and asked Baker if there would be enough providers "to meet the increase in demand we will create in these next few years."

"I will repeat, though I think it's important, that we do believe we under-invest in both primary care and behavioral health services, and if you under-invest in something, you generally get shortages," Baker replied. "I mean, that's kind of Economics 101. And if we commit to spend [$1.4 billion] in additional resources on these services over the course of the next three years, and everybody knows we're doing that, it will have an impact on both who chooses to get into this space and who chooses to stay."