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.
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.
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.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.