Key industry leaders on controlling health care costs: We can do it ourselves

A group of influential health care executives and academics is finalizing a proposal that would allow Massachusetts hospitals and insurers to try to control rising medical costs on their own for three more years, in an effort to head off more immediate state action.

If they don’t succeed, only then could they face possible outside controls.

The plan is being developed by the Eastern Massachusetts Healthcare Initiative, which includes the state’s largest hospital and physician networks, such as Partners HealthCare, and insurers, including Blue Cross and Blue Shield of Massachusetts.

Stuart Altman, a professor of national health policy at Brandeis University in Waltham, who chairs the group, said the plan differs in two key ways from legislation Governor Deval Patrick proposed to slow the rise in costs.

The group wants a commission of “independent experts’’ and “stakeholders’’ to oversee the transition to a less expensive health care system — rather than a commission heavily comprised of government officials, as Patrick favors, Altman said in an interview today.

Altman’s group wants the commission to monitor medical spending at first, with the goal of keeping annual spending increases to about 5 percent after three years and 4 percent after five years. During the first three years, the commission would develop enforcement mechanisms for providers and insurers that don’t reach the targets.

The governor wants to go further, giving the insurance commissioner additional power to scrutinize insurers’ contracts with providers, and reject insurance rate hikes that are based on excessive payment increases to hospitals and doctors.

“We are saying the market is already working so we wouldn’t improve things by immediately imposing regulations,’’ Altman said. “It’s not just delaying; it puts in place a structure in case that’s what needs to be done.’’

The group, which recently met with Dr. JudyAnn Bigby, Patrick’s secretary of Health and Human Services, plans to release its proposal next week. The Globe obtained a copy of the draft proposal, which was developed with the help of major employers. Bigby could not be reached for comment.

House and Senate leaders are expected to file their own bill early next year. Representative Steven Walsh, a Lynn Democrat who is House chairman of the committee on health care financing, has talked about keeping providers and payers to at most 4 percent increases. Walsh said he could not comment on the group’s proposal today because he had not been briefed on it.

Patrick administration regulators said that they have approved an average 4.8 percent increase in base premiums for individuals and small businesses proposed by Massachusetts insurers, to take effect January 1.

The increase is lower than in past years, but some said it was still too much. Health Care For All, a consumer advocacy group, and the Greater Boston Interfaith Organization had demanded that the state and industry officials hold health care cost increases at zero for the next year.

Generally, there is agreement among government officials and the industry that the state should move to a system of “global’’ or “bundled’’ payments, in which providers are given a monthly per-patient budget for all care, rather than allowing them to continue billing for each separate service given to a patient.

Altman’s group wants the commission to monitor whether providers and insurers are moving toward this new payment system in their contracts — and impose sanctions if they don’t.

But while he said members of the Eastern Massachusetts Healthcare Initiative unanimously back the plan, at least one industry group — the Massachusetts Association of Health Plans — raised questions about it. Spokesman Eric Linzer said it appears to include loopholes that would allow the highest-paid hospitals and doctors groups to continue to charge higher prices than many competitors for providing similar care. Partners, a member of the initiative, includes Massachusetts General and Brigham and Women’s hospitals, which are among the better paid providers.

“We believe the market power of certain providers has to be addressed,’’ Linzer said.

Liz Kowalczyk can be reached at

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