HEALTH CARE FOR ALL, INC, suggests an ambitious approach to tackling rising healthcare costs in Massachusetts. The effort to address costs is important, as true healthcare reform will not be sustainable without reining in costs. Indeed, much of the increase in the percentage of uninsured is the result of costs of coverage increasing more rapidly than incomes. Efforts to provide universal coverage need to occur in tandem with efforts to create incentives for the provision of cost-effective services that improve health outcomes, while creating disincentives for ineffective services. Yet cost control is neglected in most healthcare reform proposals because of the formidable political challenges that inevitably arise. Health Care For All has taken the laudable step of outlining a comprehensive approach to cost-control that attempts to spread the pain from inevitable spending cuts.

The challenge for a state wishing to control costs is to leverage those forces within its control, while acknowledging that some cost issues cannot be addressed at the state level. For example, facilitating the development of regional IT networks and electronic health records, developing drug formularies for state programs based on cost-effectiveness evidence, creating incentives within the state for medical graduates to pursue and practice primary care, monitoring of hospitals and other healthcare providers, and Medicaid financing and monitoring are all areas within state control, and Health Care For All's proposal considers some of these approaches.

However, decisions about the coverage and payment for healthcare services by Medicare primarily occur at the federal level. As private payers usually follow Medicare's lead, federal policy will likely predominate in affecting provider and patient behavior, particularly regarding the volume and mix of services that each considers desirable. In this context, a state such as Massachusetts might advocate for changes in federal policy, such as prioritizing services based on the outcomes they provide, on cost-effectiveness data when available, and on the healthcare needs of the population. Efforts such as these may support state efforts to implement meaningful and sustainable cost control, although their success may be limited in the absence of a federal demonstration program that can more fully align incentives for providers and patients. More generally, the incentives for the development of expensive new devices, drugs, or services depend on the broader willingness of Americans to pay for them. Perhaps local reform efforts will spur the hard, national conversations that must take place if we are to see comprehensive and sustainable cost control.