Reading between the lines at cost trend hearing

Baker, Healey remarks hint at broader market concerns

WHAT PERHAPS was the most surprising thing about this year’s Health Policy Commission cost trends hearing was how there was essentially no discussion of health care costs.

Had panelist Andrew Dreyfus, the CEO of Blue Cross Blue Shield of Massachusetts, not added a very brief comment noting worries of health care affordability challenges resulting from new price increase demands from hospitals, doctors, and pharma companies,  that entire issue—often one that makes commissioners fall out of their chairs with worry– may have escaped any attention at all this year.

In this unusual year, the truncated hearings focused primarily on issues tied to COVID-19 challenges and health inequities, driven significantly by social factors and racism, as was  cogently argued by keynote speaker Dr. David Williams of Harvard.

The health inequity presentation and discussion was bookended by taped comments from Gov. Charlie Baker at the beginning of the meeting and Attorney General Maura Healey at the end.  While the bulk of their comments were focused on COVID impacts and racial and social justice concerns, they did venture out a bit. In their own somewhat cryptic ways, they both made comments about our health care system’s need to redistribute financial resources as a means to get to an overall higher functioning health care system and to advance equity.

 Baker talked up the health care proposal he filed a year ago, which he described as “more important than ever” during this COVID era. He reminded everyone that his proposal calls for increasing primary care and behavioral health spending by 30 percent over three years while still staying under the state’s cost growth benchmark.

To accomplish that goal, some amount of redistribution of dollars away from specialty and procedural care would be needed. Still, because primary care and behavioral health start at such a relatively low spending base, 30 percent net growth over three years can likely be accomplished, and still leave some room for growth in spending for hospitals and specialists.   There would be room for some spending growth outside of primary and behavioral health care for a good number of providers if, over the three-year period, the most overpaid providers – Massachusetts General Brigham and Boston Children’s Hospital — were essentially held to no price increases.

I believe Baker would actually love for that to happen, but don’t expect him to say it out loud any time soon.

As for Healey, her words overall were tougher on providers but, like the governor, she was careful not to be overly detailed about what she thinks ought to happen next—including with the Legislature or her office.

Healey spent the beginning of most of her taped speech detailing a range of inequities that communities of color tend to experience—not only related to COVID, but really all of the time from “the legacies of structural racism and racial discrimination” that exist.

She then focused more directly on the failings of our health care system, noting what she called a “mismatch” between health care needs and the spending of health care resources.  She went out of her way to emphasize that much more of our precious premium dollars are spent on health care in high income communities, even after accounting for population health needs, and noted that the underinvestment in the health of vulnerable and marginalized patient populations was not a random happening, but systematic in nature.

That is quite an indictment, and I was hoping she would detail a bit more about exactly what she means when she said that “to advance equity in health care, we need to take a hard look at how we deliver and pay for health care.”

But though she seemed reluctant to be too detailed right now about what she thinks the Legislature ought to do, my sense is that she believes Massachusetts insurers overpay our prestigious and well-heeled providers who tend to care for wealthier populations and we underpay those providers who care for poorer people—many of whom are from communities of color.

“In taking a hard look at how we deliver and pay for health care, we must be willing to change longstanding systems,” she said. No doubt, she sees a need to change how we pay for care, and to change how much we pay to different providers.

We should all hear her words and think of capitation and salaries for doctors, and global budgets for hospitals.  We should also think about either expanded public options for health insurance (like the Biden proposal), or about other state governmental policies which may more directly reduce the significant price variation paid for care under private insurance.

But lurking behind her statements, I believe is another worry.

I know that Healey’s office is very aware that well-heeled providers,  in order to maximize revenues,  are often trying to expand their presence and services in higher income communities through purchase of certain lucrative physician practices or through ambulatory site expansion.   While hospital purchases tend to get governmental attention, these other market distorting practices—often taking place without sufficient regulatory scrutiny–also create inequities.   These expansions allow these wealthier providers to grow stronger, while weakening those who are trying to hold on to some commercial business to offset costs not fully recovered from caring for higher proportions of Medicaid patients.

The consequence is not only for the providers of course—but really for the people that they serve as weakened providers may not be able to sustain money losing, yet necessary services like mental health or addiction treatment.

Healey’s comments make me think that she is thinking very broadly about the operations and fairness of our health care system, and how its current structural aspects, and certain business transactions, if allowed to go forward tend to maintain or even increase inequities, rather than serve to reduce them.

I certainly share her worry that communities of color and lower income communities are actually “suffering worse outcomes from our health care system itself”.

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Seems to me that we would all be well served for the Health Policy Commission to dive into all of these issues in a more detailed way as it pursues its equity agenda over this next year.   My guess is that Healey and her staff will be very interested in what that data shows.

Paul Hattis is a retired associate professor at Tufts University Medical School and a former member of the Health Policy Commission.