Health spending in Massachusetts continues to grow faster than household income, according to a new study, raising concerns about access to care, even before taking into account the recent disruption from the Steward Healthcare bankruptcy.
Total per capita health spending will rise to $10,264 in 2022, exceeding five digits for the first time and increasing 5.8% from 2021, according to the Health Policy Commission’s (HPC) latest annual health care spending trends report. has become clear. Healthcare costs in Massachusetts will exceed $70 billion, reaching $71.7 billion in 2022 from $67.8 billion in 2021, according to HPC.
This is the second-highest year-on-year growth rate since the HPC was created 10 years ago, and is only surpassed by the 2020-2021 period, but experts believe that spending has increased significantly since the start of the HPC scheme. This is considered an abnormal value because of “rebound.” COVID-19 pandemic.
“Across all categories of care, the primary factor driving this growth was rising prices, not more care being provided,” HPC said in a report released Thursday.
Analysts cite a variety of data points that underline the top-line trend, indicating an increasing burden on Bay State families.
Massachusetts has the second-highest family health insurance premiums in the nation, with the average annual medical cost for a family being more than $29,000, including out-of-pocket costs, HPC said. The number of bay starters with private insurance who were unable to receive necessary medical care due to cost increased by 50% in two years, from 600,000 in 2021 to 900,000 in 2023. Businesses are also struggling with costs and turning to high-deductible plans to limit costs. Insurance premiums will increase, regulators say.
“Achieving the Healy-Driscoll Administration’s goal of increasing the Commonwealth’s economic competitiveness so that families and businesses can survive and thrive requires addressing health care affordability in a meaningful way.” writes HPC. “These challenges require bold action to move our health system from the status quo to a new trajectory that is more affordable, sustainable, and equitable.”
Much of the growth in health spending was driven by commercial price increases. Commercial health spending per insured person in Massachusetts increased by 5.2% from 2019 to 2022, a rate higher than the national average or the concurrent change in the state’s median household income over the same period, HPC said. said.
Experts also pointed to pharmacy spending as an area driving broader trends. From 2017 to 2019, pharmacy spending per enrollee increased by 0.7% annually. According to HPC, the three-year period from 2019 to 2022 saw a sharp increase of 8.2% per year.
“Pharmacy spending trends have been one of the biggest drivers of health care spending in Massachusetts in recent years,” said HPC Executive Director David Seltz. “Given what we’ve seen with the uptake of some of these new blockbuster drugs and the entry of very expensive new drug therapies (and) gene therapies, I think we can expect that trend to continue.”
Regulators drew new attention to Steward Healthcare’s failure in its latest report, even though the latest cost trend data through 2022 does not reflect the system’s failure that occurred this year.
Instead of updating many of the recommendations from last year’s report (which so far has not been adopted by lawmakers), the HPC this time made proposals focused on protecting the nation from a repeat of the stewardship crisis. .
Regulators called on lawmakers to expand their oversight tools, particularly by making more transactions subject to HPC review. Enforce transparency requirements that stewards allegedly ignored. Better protect historically underserved communities. Address pressure points such as provider pricing inequity.
“Overall, this is a very strong reform package that, if passed and implemented, will put us in a much stronger position as a federation to protect our system and plan better. “This is the boldest step forward we’ve ever seen.”The system is moving forward,” Seltz said.
To contribute to the long-running debate over more or less government regulation, HPC leaders have for years urged lawmakers to expand scrutiny and grant more regulatory powers to more forcefully reverse the tide of cost growth. I’ve been asking for it.
The House and Senate each approved major health care oversight reform bills this year, but top Democrats have so far been unable to hammer out a compromise that includes protections that lawmakers say will prevent a repeat of the stewardship crisis. do not have.
One of the questions Thursday from committee member Martin Cohen, president of the MetroWest Health Foundation, underscored the polite disagreement between Mr. Seltz and the Healey administration’s medical chief.
Mr. Cohen reflected on the Steward-inspired recommendations and asked what systems other states have in place. “I don’t think we’re on the front lines here,” he said.
“As I look through this list, I can think of at least a few states that are further along than Massachusetts on each list,” Seltz responded. “I think it’s fair to say that we are no longer the leaders on many of these topics.”
Health and Human Services Secretary Kate Walsh disagreed.
“I think people have elements of that, but I don’t think all of them,” Walsh said. “Maybe they’re strong in physician practices. That’s how I think about California. My reading is…even considering the stewardship challenges that other states are grappling with as well, people are not as strong in Massachusetts.” I mean we’ve been looking at how states do this. So I think we’re ahead of the curve in some ways.”
The landmark Cost Containment Act of 2012 established “benchmark” targets for how much Massachusetts’ health care spending would increase each year and created the HPC to monitor many of the state’s health care trends.
Although there were year-to-year fluctuations, cost growth approached the goals originally set by the state. Average spending increased 3.4% annually from 2012 to 2017, slightly below the benchmark of 3.6%.
However, from 2017 to 2022, the average annual growth rate rose to 4%, exceeding the target for that period. The latest data shows the second highest annual growth rate ever.
Other reports from national institutions and watchdogs have also recently warned of increased pressure in the health sector. More than four out of 10 non-Steward hospitals reported negative operating margins through a significant portion of the fiscal year.
“This is a time of dramatic change for healthcare in Massachusetts, and as the (Healthcare Information Analysis Center) and HPC data make abundantly clear, it is patients and patients who are feeling the biggest aftershocks. health care providers,” the Massachusetts Department of Health said. Hospital Association President Steve Walsh said Thursday. “We look forward to testifying at the HPC hearing next month about how these enormous pressures, which extend far beyond the stewardship crisis, are impacting every corner of care delivery in the Commonwealth. Masu.”
