Mass. health care costs moderating

But commission says not everyone benefits equally

THE MASSACHUSETTS HEALTH POLICY COMMISSION reported on Wednesday that health care is becoming more affordable, but not for everyone.

As recently as 2009, Massachusetts spent more per person on health care than any other state in the nation. But in recent years the growth in health care spending has moderated, rising 2.4 percent in 2013, 4.2 percent in 2014, and 4.1 percent in 2015. In all three years, the Health Policy Commission’s target for annual cost growth was 3.6 percent.

Despite the slower growth in spending, the cost of health care in Massachusetts above the national average. According to the commission, per-person health care spending overall in Massachusetts is 6 percent above the US average. Costs are much higher for inpatient and outpatient hospital care – 19 and 24 percent above the US average, respectively. Spending on physicians, however, is 9 percent below the US average.

David Torchiana, the CEO of Partners HealthCare, a hospital system often accused of charging more for care that competitors provide at far less cost, looks at these numbers and sees promise. In interviews and op-eds, he has made the case that Massachusetts is a high cost-of-living state, which inevitably translates into higher prices for health care and hardships for individuals, particularly low-income workers. But he notes that, when measured against income, the state’s health care costs rank among the lowest in the country.

Officials from the Health Policy Commission presented data on Wednesday showing that the cost of health care in Massachusetts falls disproportionately on those at the lower end of the income scale. For example, the data indicate a family with an income of $60,000, or 300 percent of the federal poverty level, spends 30 percent of its income on health care. For a family with income of $80,000, the percentage is 25 percent, and for a family with income of $120,000 the percentage is 18 percent.

The commission’s staff also said employees of firms that pay low wages face larger premium payments than employees of firms paying high wages.  According to the presentation, a worker at a low-wage employer faces an average premium of $16,251, of which the employee pays $5,491, or 34 percent of the total. Yet at a high-wage employer, the average premium is $19,263 and the employee only pays $4,190, or 22 percent of the total.

Officials said 39 percent of state residents have incomes between $20,000 and $80,000, or between 100 percent and 400 percent of the federal poverty level.

Stuart Altman, the chairman of the Health Policy Commission and a professor at Brandeis University, said the data highlight a major problem. “There’s been a lot of loose language floating around about that we’re higher income, therefore health care spending in Massachusetts is not a problem,” he said. “What these slides show is that for a significant amount of our population, it is a real problem and we can’t mask it over by the fact that some of us earn significantly above the national average and can afford it.”

Altman didn’t mention Partners or Torchiana by name, but his reference to “loose language” appeared to be a reference to him. A spokesman for Partners declined comment.

Dr. Donald Berwick, a member of the commission, said the numbers were stunning.  “This is a wealth transfer process,” he said.

Dr. Carole Allen, another member of the commission, said it may make sense for policymakers to mandate that employers pay a sliding share of an employee’s premium based on the worker’s salary level. Other members of the commission, however, questioned whether employers are legally allowed to pay different amounts of health care benefits to employees.

The discussion at the Health Policy Commission was part of a larger effort to understand the cost drivers of health care in Massachusetts and set a benchmark for cost growth in the future. Key drivers of health care spending in Massachusetts are the cost of prescription drugs (up 10.2 percent in 2015) and the fact that a disproportionate amount of care is provided in higher-cost hospital settings.

In 2015, 53.3 percent of hospital care in Massachusetts was provided in lower-cost community hospitals, a percentage that has been steadily declining over the last five years. By contrast, the percentage of care provided at higher-cost teaching hospitals and academic medical centers has increased over that period to 18.6 percent and 28.2 percent, respectively.

The commission singled out one promising sign at Lahey Medical Center in Burlington, which acquired Winchester Hospital in 2014. Since the acquisition, discharges from Winchester, a community hospital, have increased while falling slightly at Lahey, a teaching hospital. “Directionally, this is exactly what we want to see,” said David Seltz, the executive director of the Health Policy Commission.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Overall, emergency room visits at hospitals are slowly declining, falling from 378 visits per 1,000 people in 2011 to 364 visits in 2015. At the same time, however, the number of visits related to behavioral health issues, primarily due to opioid abuse, has risen from 22.9 visits per 1,000 people in 2011 to 26 in 2015. Officials said Massachusetts has the highest rate of emergency room visits for behavioral issues in the nation, twice as high as the next highest state.

  • Ellis Sonatchi

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