The State of Massachusetts Business 2019

Posted by Christopher Geehern on Jan 29, 2019 10:12:55 AM

Associated Industries of Massachusetts President Richard C. Lord delivered his final State of Massachusetts Business address last Friday before an audience of 300 business leaders in Waltham.

Lord said that at a time when there are more job openings than job seekers in New England and throughout the United States, Massachusetts must summon all its creativity and innovation to solve the structural shortage of qualified workers.


Topics: Massachusetts economy, Richard Lord, State of Massachusetts Business Address

Court Disallows Millionaire's Tax

Posted by Christopher Geehern on Jun 18, 2018 10:04:01 AM

The Massachusetts Supreme Judicial Court today disallowed a proposed constitutional amendment that would have imposed a surtax on incomes of more than $1 million and earmarked the money for transportation and education.

ScalesofJusticeVerySmallThe court, ruling in a case brought by AIM President Rick Lord and four other business leaders, decided that the initiative violated the state constitution by posing two unrelated questions to voters – whether they favored the surtax and whether they favored the required appropriation to transportation and education - in the same referendum.

The amendment would have imposed a new graduated income tax of 9.1 percent on all incomes more than $1 million. AIM believed the amendment would have had a devastating effect on the Massachusetts economy by increasing taxes for some 17,000 “pass-through” businesses that pay income tax at the individual rate.

“We are gratified that the Supreme Judicial Court agreed with the business community that the proposed question improperly combined a graduated income tax that has been rejected multiple times with spending requirements meant to appeal to voters,” Lord said.

“The lawsuit was not about public policy, but about preserving the integrity of the initiative petition process. The court did just that.”

The five plaintiffs lead organizations that represent the full breadth of the Massachusetts economy and are united in their commitment to ensuring that the commonwealth continues to foster conditions that support job development and economic growth. They are: Christopher Anderson, President of the Massachusetts High Technology Council, Inc. (MHTC); Christopher Carlozzi, Massachusetts State Director of the National Federation of Independent Business (NFIB); Mr. Lord; Eileen McAnneny, President of the Massachusetts Taxpayers Foundation (MTF); and, Daniel O’Connell, President and Chief Executive Officer of the Massachusetts Competitive Partnership (MACP). 

The named defendants in the lawsuit were Attorney General Maura Healey and Secretary of State William Galvin. 

The Supreme Judicial Court heard oral arguments in the case on February 5.

"We conclude that the initiative petition should not have been certified by the Attorney General as 'in proper form for
submission to the people,' because, contrary to the certification, the petition does not contain only subjects
'which are related or which are mutually dependent,' pursuant to art. 48, The Initiative, II, § 3, of the Amendments to the Massachusetts Constitution, as amended by art. 74 of the Amendments," the court wrote.

"The matter is remanded to the county court, where a judgment shall enter declaring that the Attorney General's certification of Initiative Petition 15-17 is not in compliance with the related subjects requirement of art. 48 and
the petition is not suitable to be placed on the ballot in the 2018 Statewide election."

The court found no common purpose in the taxation and spending elements of the proposed amendment.

"...(W)e are unable to discern a common purpose or unified public policy that the voters fairly could vote up or down as a whole. The two subjects of the earmarked funding themselves are not related beyond the broadest conceptual level of public good. In addition, they are entirely separate from the subject of a stepped rather than a flat-rate
income tax, which, by itself, has been the subject of five prior initiative petitions. Because a reasonable voter could not fairly accept or reject the petition as a unified statement of public policy, Initiative Petition 15-17 does not meet the relatedness requirement..."

The court decision may expedite ongoing negotiations among the business community and progressive groups to compromise on three other potential fall ballot questions – one establishing paid family and medical leave, a second increasing the minimum wage to $15 per hour and a third reducing the state sales tax. The chances of achieving a so-called “grand bargain” under which the Legislature would pass consensus bills on the three issues are significantly greater with the graduated tax now off the ballot.

Lord said the tax initiative was dangerous because it would have enshrined tax rates in the state constitution.

“Amending the constitution to achieve taxing and spending by popular vote is just a terrible idea, and could undo much of the good work that Massachusetts has done in terms of creating a successful economic climate,” he said. 

Massachusetts voters have previously rejected five proposals to change the Constitution to allow for a graduated state income tax: in 1962, 1968, 1972, 1976, and 1994.

Topics: Richard Lord, Massachusetts Supreme Judicial Court, Income Surtax

Lord Re-Appointed to Health Cost Control Commission

Posted by Katie Holahan on Dec 10, 2015 12:01:59 PM

Associated Industries of Massachusetts President Richard C. Lord has been re-appointed to a five-year term on the board of a commission charged with moderating health insurance costs in Massachusetts.

aim_centennial_fm-1942-2.jpgLord was re-appointed to the 11-member Massachusetts Health Policy Commission board by State Auditor Suzanne Bump. Also re-appointed for five years was Harvard University Economics Professor David Cutler. Former gubernatorial candidate and former Medicare and Medicaid Director Donald Berwick will also join the group under an appointment by Attorney General Maura Healey.

The Health Policy Commission is an independent state agency that develops policy to reduce health-care cost growth and improve the quality of patient care. Created under the state health-cost control law of 2012, the HPC is responsible for monitoring the performance of the health care system, analyzing the impact of health care market transactions and ensuring that health-care costs rise no faster than the overall rate of state economic growth.

“The Health Policy Commission works on the front lines of the battle to make health-insurance costs affordable for employers and their workers,” Lord said.

“It’s a privilege to represent hard-working employers in this important work.”

The commission has recently been reviewing a 4.8 percent surge in total health-care expenditures during 2014, an increase that exceeds both the 2.4 percent increase for 2013 and the 3.6 percent cost benchmark. Massachusetts patients spent $54 billion - that's $8,010 per person – on medical care last year while employers continued to pay some of the highest health-insurance premiums in the country.

The commission heard from health-care experts, elected officials and employers during three days of hearings in October focused on identifying strategies to limit cost increases and improve quality.

AIM-member employers often cite the cost of providing health insurance to workers as one of their primary concerns about doing business in the commonwealth. The issue is among four major iniatives included in AIM's Blueprint for the Next Century long-term economic plan for Massachusetts.

Stuart Altman, Professor of National Health Policy at The Heller School for Social Policy and Management at Brandeis University, chairs the Health Policy Commission board. Other members in addition to Lord, Cutler and Berwick include Wendy Everett, President of NEHI, a national health policy research institute; Carole Allen, a retired pediatrician from Arlington; Martin D. Cohen, president/CEO of the MetroWest Health Foundation; Secretary of Administration and Finance Kristen Lepore; Ron Mastrogiovanni, President and Chief Executive Officer of HealthView Services; Secretary of Health and Human Services Marylou Sudders; Veronica Turner is the Executive Vice President of 1199SEIU.

Lord is widely acknowledged as an expert on the impact of health-insurance costs on employers. He serves on the boards of the Massachusetts Health Quality Partners and the Massachusetts Health Council and is a former board member of the Commonwealth Health Insurance Connector Authority.



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Topics: Health Care Costs, Richard Lord, Business Costs

AIM President Named to Commission to Oversee Health Costs

Posted by Christopher Geehern on Nov 14, 2012 3:00:00 PM

Associated Industries of Massachusetts President Richard C. Lord has been named to represent employers on the board of a new commission that will regulate the state's health care system and monitor limits on the growth of health-care costs.

LORD alternate.MediumState Auditor Suzanne M. Bump appointed Lord to the board of the Health Policy Commission (HPC), a semi-independent entity charged with setting the annual health cost growth benchmark established under a law approved in August. The commission will monitor progress through annual cost trends hearings; register provider organizations; certify Accountable Care Or-ganizations (ACOs) and Patient Centered Medical Homes (PCMHs); and administer the Healthcare Payment Reform Fund.

Stuart Altman, an economist and national health policy expert from Brandeis University, will chair the commission.

“The Health Policy Commission will be at the center of Massachusetts’ first-in-the-nation effort to maintain a world-class health-care system that employers and consumers can afford,” Lord said.

“AIM believes that the health-care market can ultimately correct itself without overly restrictive government intervention if everyone works together as they did when Massachusetts passed health care reform in 2006.” 

The cost-containment bill signed by Governor Deval Patrick limits the increase in medical spending in Massachusetts to a level equal to overall economic growth from 2013 until 2017. The spending growth target will drop to 0.5 percentage points below gross state product from 2018-2022 before returning to the economic growth benchmark in 2023 and beyond.

The Massachusetts economy has been growing at 3.7 percent annually in recent years, while medical spending rose between 6 and 7 percent prior to the economic downturn. AIM supported a more aggressive cost-control target of two percentage points below economic growth, but nevertheless commended the Legislature and governor for moving forward with cost-control sequel to the landmark 2006 reform.

The legislation largely affirms changes already taking place in the health care market - paying doctors for outcomes instead of procedures, steering patients to doctors who provide good care at reasonable prices, and coordinating care to keep patients healthy and out of the hospital. The law also provides changes sought by employers in the formula for calculating fair share assessments under the 2006 health reform law.

“The work of the commission requires extraordinarily talented individuals who are well equipped to advance its mandate and to represent the interests of all major stakeholders,” said Bump. “Their leadership will help enable us to devise a more effective and affordable healthcare model.”

The Health Policy Commission marks the latest in a series of high-profile appointments that Lord and AIM have undertaken as part of the association’s leadership role in addressing the health-cost crisis. Lord served as a charter member of the Commonwealth Health Insurance Connector Authority from 2006-2010, and currently serves as a director of the Blue Cross Blue Shield of Massachusetts Foundation and the Massachusetts eHealth Collaborative.

AIM not only pushed hard for the new cost-control law, but has also developed a multi-year educational initiative called The Solution to help employers take advantage of the landmark changes taking place within the health-care system. The education program includes a seven-session certificate series on health cost management, Webinars, on-site benefits consultation and online resources.

Separately, the association recently expanded its Health Care Committee to establish a working relationship among employers, insurers, hospitals and doctors. The committee is the only one of its kind, allowing business people and health care experts to collaborate on issues including Federal and state health care reform reconciliation, chronic disease management and emergency care usage.

Topics: Health Care Costs, Issues, Richard Lord

Massachusetts Employer Confidence Slips into Neutral

Posted by Andre Mayer on Jul 5, 2011 9:26:00 AM

Confidence among Massachusetts employers slipped into neutral last month, reflecting a national economy that likewise appears to have taken its foot off the accelerator.

Business confidenceThe Associated Industries of Massachusetts Business Confidence Index dropped 1.7 points in June to a nine-month low that left it at a neutral 50-point reading on a 100-point scale. It marked the third consecutive monthly decline as business confidence ended the first half of 2011 almost four points lower than it was a year ago.

“Declining business confidence in May and now June continues to reflect direct perceptions of a slowing economy coupled with uncertainties about national and global developments, reminiscent of the drop a year ago” said Raymond G. Torto, Global Chief Economist at CB Richard Ellis Group, Inc. and Chair of AIM's Board of Economic Advisors (BEA).

“But two consecutive declines, for the first time since last summer, indicate another setback for an economic recovery that has struggled to gather momentum.”

The AIM index has appeared monthly since July 1991. The June results mark the completion of 20 years. It reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

Weakness in the national economy appears to be driving down business confidence more than employer views of their own operations or the state economy. The AIM survey’s U.S. Index of national conditions was off 5.4 points in June and 5.9 for the year to 38.9, while the Massachusetts Index lost only 1.6 points to 46.6, down 1.2 from last June.

“This is exactly the (U.S. Index) reading we saw at the end of 2009,” pointed out BEA member Fred Breimyer, Regional Economist for the Federal Deposit Insurance Corporation. “Although the economy is in many respects stronger now than it was then, hopes for positive policy intervention from Washington are much lower.”
The only upward movement in the June survey results came when respondents assessed the positions of their own operations. The Company Index, gained three-tenths of a point to 55.0, and the Employment Index added 1.3 points to 53.2, while the Sales Index slipped six-tenths to 53.5.

“For the business community, as well as for job-seekers, the most serious economic problem is high unemployment,” commented Richard C. Lord, President and CEO of AIM and a BEA member.

“It depresses consumer confidence and consumer demand, holding back the robust growth we need to get our whole economy – not just a few sectors – back to full health. Our members, responding to special questions about employment, increasing link together three impediments to hiring: uncertain economic prospects, high non-wage employment costs, and difficulty finding people with the skills they need. Because uncertainty is beyond our control, controlling costs and promoting skills development emerge as the policy keys to job creation."

Topics: AIM Business Confidence Index, Massachusetts economy, Richard Lord

Employers, Consumers Hold Key to Resolving Health Cost Crisis

Posted by Eileen McAnneny on Jun 28, 2011 1:11:00 PM

Massachusetts will solve its health-care cost crisis only if employers and consumers become engaged in the issue and change the way they purchase medical services, AIM President and Chief Executive Officer Richard C. Lord told a state hearing this morning.

Employers' Campaign for Affordable Health“Doctors, hospitals and insurers in Massachusetts are moving aggressively to change the financial model of health care in a way that will reduce expenditures. The ultimate success of those changes will depend upon the ability of employers and citizens to evaluate the cost and quality of their health care in the way they do for cars and other purchases,” Lord said at the annual health-cost trend hearings sponsored by the Massachusetts Division of Health Care Finance and Policy.

Lord said AIM recently established the Employers’ Campaign for Affordable Health to help businesses and their employees become informed health-care consumers. The AIM educational effort – which will include Web resources, online programs and seminars - is expected to resemble the campaign the association undertook to explain the 2006 Massachusetts Health Care Reform Law.

Lord’s comments echoed a report issued last week by Attorney General Martha Coakley urging consumers to shift the manner in which they purchase health care to align payments with value – measured by factors such as reasonable cost and good quality of care.

“It is essential that businesses and consumers be engaged in efforts to promote a value-based health care market,” the report said.

Lord said three of Coakley’s conclusions hold particular interest for employers seeking to reduce health insurance costs:

  • There is wide variation in the payments made by health insurers to providers that is not adequately explained by differences in quality of care;
  • Tiered and limited network products have increased consumer engagement in value-based purchasing decisions; and
  • Health care provider organizations designed around primary care can coordinate care effectively.

“The central message to employers and to employees is this: the more affordable medical care provided by tiered networks does not equal bad medical care,” Lord said.

Private group health insurance premiums in Massachusetts grew by 5 percent to 10 percent annually when adjusted for benefits from 2007 to 2009, far outpacing growth in the Consumer Price Index in the Northeast over the same period. Private payer health spending increases were driven largely by provider price increases, while smaller growth rates in the public sector were attributed to increased utilization.

Governor Deval Patrick and key state legislators who spoke at the health-cost hearings Monday affirmed their determination to address the surging medical costs that continue to impede the economic recovery. The governor left little doubt that he wants a cost-reform bill on his desk before the end of the year.

“We need the Legislature to get me final legislation for signature this fall because the cost trends we are discussing today are about more than numbers and data sets. They are about people and their most urgent needs,” Patrick said.

Employers looking for a “plain English” summary of the health cost debate and what it means to their companies are invited to join AIM for a free Webinar on July 6 from 9-10 a.m.


Topics: Associated Industries of Massachusetts, Health Care Costs, Deval Patrick, Richard Lord

Charles Baker Speaks at AIM/Denterlein Candidate Series

Posted by Christopher Geehern on Jun 4, 2010 1:54:00 PM

AIM and Denterlein Worldwide yesterday wrapped up a series of forums with the candidates for governor with Republican candidate, Charlie Baker. The forum series gave candidates the opportunity to discuss their approaches to business and economic issues with a small audience of executives from throughout the commonwealth.

Mr. Baker yesterday covered topics ranging from the regulatory process and budgetary planning to health care reform, education and taxes. AIM President and Chief Executive Officer Richard C. Lord introduced the program.


AIM has posted segments of candidate remarks at these forums to give employers an opportunity to hear directly how each intends to steer Massachusetts out of the deepest recession in 80 years. Please share on our blog, your questions for any of the gubernatorial candidates, and AIM will attempt to secure a response.

Governor Deval Patrick visited the forum in March. State Treasurer and Independent candidate Timothy Cahill visited the forum in April. Click the links below to hear their remarks.

Patrick Remarks

Cahill Remarks

Topics: AIM, Massachusetts economy, Health Care, Deval Patrick, Candidates, Taxes, Massachusetts, Richard Lord, State Budget, Business Costs, Timothy Cahill, Charlie Baker

AIM's Government Affairs Offers Opportunity to Engage on Issues

Posted by Brad MacDougall on Apr 28, 2010 11:54:00 AM

Yesterday, John Regan, AIM's Executive Vice President of Government Affairs hosted IssueConnect a monthly live webinar which updates members on economic trends in Massachusetts and provides an opportunity to engage on all the public policy issues that affect your bottom line - taxes, health care costs, and proposals to mandate seven sick days and other benefits.  Should you have any questions or feedback, please contact John Regan, AIM’s Executive Vice President of Government Affairs or 617-262-1180.

Register here for the next IssueConnect webinar scheduled for Tuesday, May 25, 2010.  Join us to address the pressing issues of the employer community.

In addition to The Business Insider blog, connect with us on Facebook, LinkedIn, and Twitter.

Here are a few of the answers to questions posed by members during April's IssueConnect:

Does AIM support state legislation to allow municipal government to join the state healthcare plan known as the Group Insurance Commission (GIC) to relieve municipal budgets and reduce pressure on state aid?
AIM supports granting Massachusetts municipalities the ability to alter health care plan design, without having to bargain those changes with municipal unions.  Municipal health insurance costs have increased at double-digit rates annually since 2000 – more than five times the rate of inflation – growing from just 6 percent of municipal budgets in 2001 to a projected 20 percent by 2020, according to a Mass. Taxpayers Foundation analysis.

Two straightforward changes would provide large and immediate savings in health costs, dwarfing the savings from all other municipal relief proposals:

  • Give local officials the power to design their health insurance plans outside of collective bargaining.
  • Require by statute that all eligible local retirees enroll in Medicare as their primary source of health insurance coverage.

In both cases, these changes would merely provide municipal leaders with the same tools as the state to manage health insurance costs and bring the extraordinarily generous benefits of municipal employees – the last bastion of the $5 co-pay – in line with state employees.

Allowing municipalities to change their health benefits outside of collective bargaining – as has long been done by the state’s Group Insurance Commission (GIC) – would save cities and towns roughly $100 million in the first year alone and as much as $2 billion annually by 2020.

What do you see as potential growth areas for jobs?
The largest growth in the next few years is likely to be in some of the more cyclical industries.  We’ll see gains in business/technical/professional services, especially at the higher end (most of the gains so far have been temp employment), and leisure/recreation (e.g., restaurants).  These should pick up as the economy begins to expand in earnest.

Among the industries specifically hit, some parts of construction (not office buildings), and also manufacturing, are likely to regain lost jobs.  There’s unlikely to be much growth in government jobs, and there could be further significant losses.

Health services will continue to be strong, education probably less so.

How does the national and state healthcare reform efforts impact job creation?
Healthcare costs are one of the top issues continually raised by employers and business leaders trying survive and grow their companies.  AIM’s board of directors decided that participating in reform and cost containment efforts provides employers the best opportunity to help solve the long-term health cost problem – which currently strains employer’s ability to create jobs.  AIM believes that sustainable job creation in the Commonwealth requires significant commitment by public policy decision makers and all stakeholders to address to cost of healthcare.

In early April, Rick Lord AIM’s President and CEO spoke with Health and Human Services Secretary Kathleen Sebelius and her staff at length about the decision by Massachusetts businesses in 2006 to work with government, health-care providers, insurers and consumer groups to develop a framework of shared responsibility to expand health insurance coverage.  Recently, Sandy Reynolds, AIM’s Executive Vice President commented about the impacts of the federal law on Massachusetts.

AIM offered comments on the ongoing state healthcare cost containment proposals to tackle health-care costs for small businesses; we made clear that any solution must involve both insurers and providers. AIM believes that the time is now for offering some relief and we cannot let the fact that the solutions are hard to implement or disruptive of the status quo be an excuse for not forging ahead to resolve the health care cost conundrum.  AIM recently commented on an initial public policy plan outlined by the Senate President and we are committed to work with the Administration and the members of the General Court as healthcare cost containment measure move through the legislative process.

Our opportunity to address the high cost of healthcare in the Commonwealth has arrived. We invite you to join us in that effort.

Has AIM taken a position on the Sales Tax Ballot question?
Not at this time.

Topics: Massachusetts Legislature, Employers, Massachusetts economy, Massachusetts employers, Human Resources, Richard Lord, Common Wealth 2010, John Regan, Policy

AIM Announces Plan to Control Health Insurance Costs for Employers

Posted by Rick Lord on Mar 10, 2010 12:03:00 PM

Associated Industries of Massachusetts today announced a comprehensive proposal to control soaring health insurance costs for small employers while business, government and health care providers develop long-term solutions to the problem.

The AIM proposal calls for regulators to limit - temporarily - reimbursements to doctors and hospitals to the median cost for individual medical services in 2009. The proposal would also establish requirements for health insurance companies, which would be required to offer low-cost plans with reduced networks of providers, and could not spend more than 10 percent of consumer premiums on administrative costs.

A moratorium on new health-insurance mandates and "rate shock bumpers" for small employers and individuals are also part of the initiative.

AIM detailed the proposal Wednesday before a joint hearing of the Massachusetts Legislature's Committees on Health Care Financing, and Community Development and Small Business. I was pleased to testify at the hearing with Nancy Turnbull, senior lecturer at the Harvard School of Public Health and the consumer representative on the Commonwealth Health Insurance Connector Authority.

AIM's participation in the hearing underscored both our long-term commitment to health care reform and the immediate crisis facing small employers in Massachusetts seeking to provide health insurance to workers.

The proposal balances immediate rate relief with the need to maintain a free market. The approach differs from the cap on health insurance premiums and provider reimbursements proposed by Governor Deval Patrick, but we commend the governor for adding a sense of urgency to the debate over health insurance costs.

The time is now for offering some relief and we cannot let the fact that the solutions are hard to implement or disruptive of the status quo be an excuse for not forging ahead to resolve the health care cost conundrum.

Because medical inflation has exceeded general inflation by a wide margin in recent years and given that Massachusetts health care costs exceed the national average by 15-30 percent, depending on the study, the cost of health insurance has become an impediment to job growth and economic development in the Commonwealth. Both employer and the government must demand a more transparent, efficient method for our health care delivery system and a more rational and outcome-driven compensation methodology for our payment system.

AIM supports limits on medical payments and administrative costs only as temporary and emergency measures to help small employers pushed to the brink of insolvency by insurance rate increases of up to 40 percent. The fact that an organization like AIM that is dedicated to private enterprise supports government price intervention in this form reflects the fact that the health care market is unlike any other market, and that market is broken.

The long-term prescription to heal the market includes payment reform that lowers health premiums for employers and individual consumers. It also includes the development of health resource planning capabilities; enactment of malpractice reform and peer review statutes; implementation of administrative simplification measures; and consumer engagement.

Employers supported the 2006 Massachusetts Health Care Reform and have paid repeatedly to expand coverage to fellow citizens through fair share contribution, safety net trust fund surcharges, increased premium rates, increased take up of employer sponsored insurance and increased taxes going to fund public health program expansions.  It's now time for doctors, hospitals, clinics and health insurers - those who know health care best - to develop the long-term, market solutions that will ensure an affordable and functional health system for the citizens of the commonwealth.

The proposal to limit reimbursements would allow providers who charge rates below the 2009 median to continue operate as they do now, negotiating rates with health plans. Medical providers who charge more than the 2009 median would have reimbursements tied to the rates paid by Medicare , plus a percentage that lawmakers would determine. The plan reflects recent findings by Attorney General Martha Coakley that medical costs are unrelated to the quality of care:

"Price Variations are not correlated to (1) quality of care, (2) the sickness or complexity of the populations being served, (3) the extent to which a provider is responsible for a large portion of patients on Medicare or Medicaid, or (4) whether a provider is an academic teaching or medical facility. Moreover, (5) price variations are not adequately explained by differences in hospital costs of delivering similar services at similar facilities . . . Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers."

AIM urges the Massachusetts Legislature and the administration to move forward on health care cost-control as soon as possible. The employers of the commonwealth cannot wait.

Topics: Associated Industries of Massachusetts, AIM, Health Insurance, Richard Lord

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