Massachusetts Sets Global Cap on Health Care Costs

In an attempt to impose top-down containment on Massachusetts’s soaring health care costs, Democratic Governor Deval Patrick signed a law which creates a statewide global cap on public and private health care costs. The law expands the state’s bureaucracy and specifies a target growth rate for overall medical spending based on the growth rate of the state’s economy.

Joshua Archambault, director of health care policy at the Massachusetts-based Pioneer Institute, says he doesn’t expect the so-called “global cap” to rein in costs in the long run.

“You certainly can in the short term hold down costs and put certain companies in tough situations financially,” said Archambault, “But in the long run they’ll be forced to pass on any additional costs that are put on them to the consumer to make up the difference. If they don’t, they’ll simply go out of business.

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