Seltz dissects Mass. health care market
Massachusetts health care costs are expected to actually drop this year because of a decline in non-COVID care, but the executive director of the state’s Health Policy Commission says many of the underlying drivers of spending haven’t changed.
David Seltz, speaking on The Codcast with John McDonough of Harvard’s T.H. Chan School of Public Health and Paul Hattis, a retired associate professor at Tufts University Medical School, said the clout of larger health care providers remains undiminished and health insurance rates are already scheduled to rise next year.
Seltz said one of the disconnects in the state’s health care system – that larger hospital systems receive higher payments for many procedures without providing any qualitative difference in care – has remained unchanged over the last eight years.
“It does not appear to be an issue that fixes itself and policy solutions are difficult to find consensus on,” he said.
“Will these precious dollars go to the biggest systems or will they go to the smaller hospitals?” Seltz asked. “Will we actually see a greater divergence in these payment rates when the pressure is on and the pie is only getting smaller?”
Health insurers seem to be preparing for much higher costs next year. Even though health care spending is declining this year, health insurers have already won approval from state regulators to raise their rates an average of 8 percent next year. Some insurers are projecting double-digit rate increases.
“The numbers are troubling,” Seltz said. “It raises a lot of questions for you and the public because we know there will be financial windfalls for many health plans in the current fiscal year.”
He said health insurance plans are probably trying to be conservative, guessing that pent-up demand for health care services, including a COVID-19 vaccine, will drive up costs substantially. Still, Seltz said, it’s hard to defend a big rate increase at a time when costs are falling.
“That’s a hard story to tell the public, and rightfully so,” he said.
Seltz, in an interview that covered a wide range of issues just prior to his agency’s annual cost-trend hearing, made clear the Health Policy Commission will remain focused on old and new priorities to rein in health care spending.
“It’s so incredibly confusing and so incredibly burdensome,” he said. “That doesn’t seem to be providing very much value on a systemwide basis. … We’re talking about billions of dollars of just added expense.”
One of the commission’s new priorities relates to pharmaceutical costs. A new state law authorizes MassHealth, which administers Medicaid, to negotiate directly with pharmaceutical manufacturers for drug rebates. If those efforts are unsuccessful, state officials can refer the drug to the Health Policy Commission for an evaluation of whether the drug’s value matches its price.
Seltz said no drugs have been referred to the commission yet, but he said the agency is educating itself and preparing for that eventuality. “We’re really trying to build a transparent process,” he said.
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