As healthcare spending continues to rise, commissioners explore steps for plateauing growth
Photo | Grant Welker
The downtown Boston offices of the Massachusetts Health Policy Commission
Three weeks after the state's Health Policy Commission recommended strengthening accountability measures aimed at keeping health care cost growth in check, commissioners and staff on Wednesday explored what some of those steps might look like.
Health care spending in Massachusetts increased 4.3 percent in 2019, the second straight year that the growth exceeded an annual target set under a 2012 cost control law.
The HPC in September released its latest cost trends report, which found that price growth and hospital spending were among the drivers of the increased costs and identified affordability challenges for lower-income residents. It recommended that the state strengthen its tools for holding health care providers and insurers accountable for above-benchmark spending and take action to constrain excessive provider prices.
The commission's Market Oversight and Transparency Committee dove into those two policy suggestions on Wednesday, discussing price cap policies used in other states and the strengths and limitations of the current performance improvement plan process for providers and payers.
HPC Executive Director David Seltz said the conversation was one of a series he anticipates the agency having over the next few months -- including at its annual cost trends hearing on Nov. 17, when health care and government leaders will be called to testify -- to "dive deeper into these recommendations and what the policy solutions may be."
"If the commission, through that investigation, feels strongly that they want to take a position, kind of a clarifying position, on our recommendations, I think that could certainly be on the table," Seltz said.
The 2012 law that created both the HPC and another state agency, the Center for Health Information and Analysis, set up a process through which CHIA confidentially refers to the HPC payers and primary care providers deemed to post excessive spending growth. After conducting its own review, which is also confidential, the HPC can vote to require the provider or payer to complete a performance improvement plan, or PIP. As a "last resort," commission staff said, a fine of up to $500,000 can be assessed on the entity in certain circumstances.
The entity's identity would be made public once a PIP is required, although the commission to date has not required a PIP.
The HPC's Kate Mills said limitations to the current process are largely related to the statutory requirements around referrals for PIPs, which are based on increases in total medical spending adjusted for patients' health status.
The risk scores used to make those adjustments are affected by changes in medical coding and have grown 15 percent in six years, according to figures that Mills and HPC research director David Auerbach presented. The growth in risk scores from 2013 to 2018, "is equivalent to 430,000 more privately-insured Massachusetts residents with complex diabetes or 920,000 more residents with cerebral palsy," the presentation said.
Mills said risk scores "mask the majority of spending growth," meaning that "many entities simply aren't referred to the process at all."
Mills said high prices alone cannot trigger a referral and that the $500,000 penalty "is relatively low."
"It's particularly low given the levels of above-benchmark spending that we see," she said. "In a given year we sometimes see that a single provider, their commercially insured patients may have spending growth in excess of the benchmark by tens of millions of dollars, in just one year. Similarly, for payers, we see that a single payer's commercial members may have spending growth in excess of the benchmark by tens of millions."
Auerbach also discussed the variation in prices charged by different medical providers in Massachusetts, and the price cap measures adopted by Rhode Island and other states.
Rhode Island's 2009 affordability standard law limited hospitals' inpatient and outpatient price growth from year-to-year and mandated increases in the percentage of overall spending devoted to primary care, according to the HPC.
Auerbach said the Ocean State's legislation "absolutely worked to the goal of reducing spending."
In Massachusetts, he said, most spending growth has been from price growth rather than increased utilization.
The commission plans to conduct additional research around spending measurements that are "less influenced by changes in coding intensity," the implications of different price benchmarks, and how to implement caps on price levels and price growth.
The Health Policy Commission, which held its Wednesday committee meetings virtually, announced last week that its employees would be required to provide proof of COVID-19 vaccination by Oct. 26, joining several other state government entities in imposing vaccine mandates.
The commission said its vaccine requirement "applies to all HPC employees and interns, regardless of whether they work remotely or in the HPC's Boston office, unless they qualify for an accommodation on the basis of disability or a sincerely held religious belief." HPC workers who do not comply with the policy by Oct. 26 will face consequences that "may include increased safety measures, unpaid leave, or termination."
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