In recent years, health care has become a prime subject for political debate, a ubiquitous talking point and a vehicle for innovation in the industry. Yet the diagnosis on affordable healthcare in Massachusetts remains insolvent.
According to a report released by the Massachusetts Center for Health Information and Analysis on Tuesday, health care expenditures in Massachusetts in 2013 totaled $50.5 billion, or $7,550 per capita. Health care spending in Massachusetts increased by 2.3 percent per resident from 2012 to 2013, growing at a rate faster than the 1.5 percent rate of inflation.
“Medical care will always rise more than the inflationary rate just because it’s driven a lot by technology,” said Dan Berlowitz, professor at the School of Public Health at Boston University. “There are constantly new technologies that drive up costs to treat various diseases.”
One of CHIA’s goals in monitoring the Massachusetts health care system involves identifying factors contributing to high health care costs. The Center indicated that Blue Cross Blue Shield of Massachusetts, the state’s largest healthcare insurance provider, and Partners HealthCare, a network of hospital groups, were the main contributors to the high healthcare expenditures. In 2013, Blue Cross saw a spending increase of 3.65 percent, and Partners experienced a 4 percent spending increase.
An official statement from Blue Cross said they were operating well within the bounds of the cost benchmark.
Blue Cross’ “actual total medical spending” only grew 2.1 percent in 2013 – below the Commonwealth’s cost benchmark of 3.6 percent and “among the lowest spending increases of any health plan in Massachusetts,” according to the statement.
Andrew Jackmauh, CHIA special projects manager, said the increases have primarily been in Total Medical Expenses, which is the total medical spending for a member population, based on allowed claims for all categories of medical expenses as well as all non-claims related to payments to providers.
“More specifically, the report also looks at Health Status Adjusted Total Medical Expense, which also accounts for variations in health status of a payer’s full-claim members – did they get healthier or sicker?” he said. “This metric allows for a more refined comparison of TME [Total Medical Expenses] trends between payers.”
On the other hand, Boston University students who receive coverage through the Aetna Student Health have seen a decrease in health insurance costs. The rates for the BASIC plan and PLUS plan have both decreased from fall 2013 to fall 2014, with the BASIC plan rate decreasing 9.3 percent and PLUS plan rate decreasing 10.3 percent. The rate of the BASIC plan fell from $2,141 in fall 2013 to $1,941 in fall 2014. The rate of the PLUS plan fell from $2,910 in fall 2013 to $2,610 in fall 2014.
But all students eventually graduate, and many will be faced with the difficult decision of choosing a health care plan within the Massachusetts marketplace if they choose to stay in the Commonwealth.
“The [Massachusetts] insurance market is mature and competitive,” said Sonya Hagopian, vice president of corporate communications at Tufts Health Plan. “Tufts Health Plan is the second largest health plan in Massachusetts, with total membership at 1,022,842, which represents both Massachusetts and Rhode Island.”
The CHIA report found that Tufts Health Plan reported the highest average premium in 2013 at $455 per-member, per-month. To offset the high premium, high benefit levels are needed.
“Our rates are actuarially sound and undergo an approval process through the DOI [Division of Insurance],” Hagopian said. “Benefits vary and are individualized to the specific employer. Our strategy is the Coordinated Care Model, which aligns incentives and has members, providers and Tufts Health Plan working in concert. In this model, everybody is pulling in the same direction to make better health decisions and create better health outcomes.”
The findings of the CHIA report will inform the Health Policy Commission’s 2014 Health Care Cost Trends Hearing, scheduled for October 6 and 7, said Jackmauh.
“The hearing will include a review of the state’s performance under the health care cost growth benchmark, using CHIA’s calculation of Total Health Care Expenditures to evaluate the Commonwealth’s progress toward meeting this goal,” he said.
There is not enough collected data to attribute health care costs’ growth to specific policies, he said, though cost containment efforts in Massachusetts have had a positive effect on slowing the growth of healthcare costs.
“One approach to controlling health care costs that has significant support in Massachusetts, specifically, is the adoption of Alternative Payment Methodologies, particularly global payment contracting,” he said. “Adoption rates of global payment contracts in Massachusetts have been above national adoption rates. However, enrollment with primary care providers paid under such APMs [Alternative Payment Methodologies] has been flat at 34.3 percent over the past year, so there is more work to be done.”
Jackmauh said another positive sign is per capita growth in Massachusetts Total Health Care Expenditures rising at a rate slower than the Commonwealth’s overall economic growth.
“Keeping costs in line with economic growth will be particularly important as the economy continues to rebound,” he said.
Berlowitz said the key to reducing high health care expenditures is to eliminate unnecessary care, which he defined as care that provides no benefits to patients.
“Overall, when you look at different metrics of health in Massachusetts, we do reasonably well,” he said. “But again, it’s an opportunity to further improve…Opportunities are really to further reduce unnecessary care, to reduce variations in care and really to emphasize providing that care that provides the most value.”
