Over the course of the past week, a number of health care cost proposals have been put on the table, which would cap or, in some cases, cut prices paid to Massachusetts hospitals. These proposals have been introduced to the public conversation on Massachusetts health care costs at a time when the Commonwealth’s price variation commission is gearing up for its own set of recommendations.
As political and health care leaders debate new efforts to lower costs, it remains important to keep some perspective on present context and not let the decisions be framed by outdated information. For example, how is Massachusetts doing when it comes to health care cost growth? Earlier this month, the state issued some encouraging statistics, which didn’t generate the headlines they deserve. The graph below, generated by the state’s Health Policy Commission, shows that MA health insurance premium spending has grown by less than 2% annually over the last four years—a rate that is half the national trend. The state cost growth benchmark established by chapter 224 has obviously had the desired effect. Insofar as total cost trend has slightly exceeded the benchmark in the last two years, the data show that the differential is not driven by provider medical trend but by rapid growth in drug spending
And, there is a belief that Massachusetts’ costs are high because our teaching hospitals are more expensive than other parts of the nation. Well, the data tell something very different. An analysis of publicly available claims data by the Chancellor Consulting Group shows Boston AMC’s near the bottom. This is an important fact to consider when discussing proposals that cap hospital prices or cut them further.
As Dr. Torchiana wrote in the Boston Globe last month, “The burden of health care costs has been a national challenge for the last 50 years. Costs have consistently grown faster than the rest of the economy and, as a consequence, have crowded out other discretionary spending by government and employers while creating progressive hardship for individuals, particularly the low-income employed. These facts are unquestioned, but as we prepare to act on local remedies it is important to consider where our state stands on the national spectrum.”
Massachusetts does not exist in a vacuum; we are part of the national healthcare ecology and performing well on all dimensions of access, quality and costs. Course corrections in our commercial market should be thoughtful and incremental particularly given the uncertainty about what federal policy changes may be ahead.