The rising costs of health care have prompted state Senator Patricia Jehlen to author a bill that would impose more stringent limits on how health insurance companies spend their money.
Jehlen, who represents the 2nd Middlesex District, which includes Medford and Somerville, said that firms currently spend too much on advertising and administrative expenses. To rectify this, her bill would require them to spend 85 to 90 percent of their income exclusively on providing health care.
Consistent advancements in medication and treatment have placed America at the forefront of the world, but excellence comes with its costs, Jehlen said. A reduction in wasteful spending will help close this price differential, according to her plan.
"American medicine is very good and very expensive," she said. "We're glad for some of the things that happen; they save lives, but they cost money."
As researchers develop new and more effective methods and treatments, rising prices reflect the corresponding costs, according to Brian Rosman, the research director for the nonprofit organization Health Care for All.
"It's mainly due to the high cost of medical care, which has been skyrocketing the last seven years," he said. "One issue is the growing use of new prescription drugs that are much more expensive than the drugs they're replacing. Another factor is new, very expensive medical devices."
Massachusetts' uninsured also affect health care costs, Rosman said. Although the legislature passed a universal health care bill last year, not all citizens have been insured yet.
"One other factor is the growing number of uninsured in the state, and those who do have insurance are paying more and more because the cost of the uninsured is kind of wrapped up in the overall cost," he said.
Although the trend is not isolated to Massachusetts, it is exacerbated in a state renowned for the caliber of its health care and its role in training new doctors, according to Dr. Harris Berman, the dean of public health and professional degree programs for Tufts' School of Medicine.
Treatment is more expensive in teaching hospitals because the costs of instructing students are factored into the prices for treatment.
"The biggest driver of costs in Massachusetts is that we have so many academic teaching hospitals, and that so many of hospital admissions take place in academic centers instead of community hospitals," he said.
Berman said that 40 percent of hospital admissions in Massachusetts are to academic centers, far outstripping the national rate of 18 percent.
Americans will continue to reap the benefits of the country's leading role in research and development, but they will also be responsible for absorbing the costs of innovation that are embedded in the price of new medication, Berman said.
"The rest of the world sort of waits to see what happens in the United States," he said. "All the drug development takes place here, and all the cost of drug development is borne by the American user of drugs."
Given these inevitable price increases, Berman said that the government may not have an effective means of interceding and lowering costs. "I don't think state regulation can control it," he said.
But Rosman said that regulation can play a role. He recommended that legislators encourage hospitals to tighten up their practices and reduce wastefulness, although his proposed methods are not the same.
"One change we're backing is changing financial incentives to really reward providers that are more efficient and penalize providers that are less efficient," he said.
For example, Rosman said, hospitals should incur the costs of complications that arise during treatment instead of passing the expense along to the patient.
He also said Health Care For All's campaign to educate doctors about generic medications that represent alternatives to high-priced name-brand drugs is a step in the right direction.
Berman drew a distinction between access and cost in the realm of health care. He referenced Massachusetts' highly lauded universal health care bill that legislators passed last April as a sign that commitment to broadening access has yielded far-reaching results.
"New legislation in Massachusetts should solve the access problem, and nearly 100 percent of the people should be covered by health insurance because of this new law," he said. "So if this works and it's financially feasible, that's going to solve one piece of the problem for the people of Massachusetts."
Berman said that as a result of the bill, around 100,000 out of the approximately 500,000 previously uninsured citizens have gotten coverage. This, he said, is significant progress.
Though the price of health care will continue to command the attention of citizens and lawmakers alike, Berman said ensuring universal health care should take precedence over trying to lower costs.
"The rising cost is another problem we'll need to tackle, but I think we'll need to tackle it after everyone has health insurance," he said.
