Briefing: Health Care Spending
The state agency that oversees the 2012 health care cost-containment law issued its first-ever report this month that measures health care spending growth in Massachusetts
The report by the Massachusetts Center for Health Information and Analysis (CHIA), which detailed spending in 2013 based on estimates submitted by commercial health insurers, delivered mostly good news, showing that spending increased at a rate comfortably below the 2013 benchmark of 3.6 percent set by the state Health Policy Commission (HPC).
How much did the industry spend in 2013?
CHIA said spending per resident last year averaged $7,550, an increase of 2.3 percent over 2012. That's higher than the overall inflation rate of 1.5 percent, but Aron Boros, CHIA's executive director, said the growth rate last year was significantly lower than it had been in recent years, when it ranged from 4 to 6 percent. All told, $50.5 billion was spent on health care in the Bay State last year. CHIA also found that the cost of commercial premiums was virtually unchanged between 2012 and 2013, averaging $5,154 per member per year. Members paid an average of 26 percent of the cost of premiums in 2013; employers paid the rest.
What’s behind the slower cost growth?
The report tied it to slower state economic growth, which might explain the slower health care spending growth rate, at least in part. But Boros said it's likely that state policy also had an impact. He said there's a “huge” expectation that providers and payers will collaborate to keep costs low, lest the commission step in. “This is slower growth than we've seen in a decade, and an indication that we're making changes that are helping keeping costs low,” Boros said.
Were benchmarks met across the board?
While insurers and providers met the 2013 benchmark as a whole, several organizations missed the mark. For example, Blue Cross Blue Shield of Massachusetts exceeded the HPC benchmark slightly, reporting cost growth of 3.65 percent, according to CHIA. Meanwhile, four of the state's largest managing physician groups exceeded the benchmark. They included Partners Community Health Care, Beth Israel Deaconess Care Organization, New England Quality Care Alliance and Steward Network Services.
What about future expectations?
The industry will continue to evolve from relying more heavily on inpatient treatment to one that favors outpatient treatment, which typically costs less. This is illustrated by the CHIA report, which shows inpatient expenditures grew at a slower annual rate (1.2 percent) than those for outpatients (2 percent). This could continue to drive costs down, unless growing demand pushes outpatient prices upward, Boros said.
WBJ Web Partners
Most Recent
Most Recent
0 Comments