Hospitals cite progress on costs
Spending on health care in Massachusetts grew by 3.9 percent in 2015, exceeding a 3.6 percent cost control benchmark, but the Massachusetts Hospital Association says the latest report shows hospitals are making progress in bringing down costs while transitioning to new care delivery and payment models.
An annual Center for Health Information and Analysis (CHIA) report released Wednesday showed that growth in total medical expenses from hospital inpatient and physician services - 1.5 percent and 1.3 percent, respectively - was significantly lower than the growth in overall statewide total medical expenses.
And the report revised the 2014 total health care expense growth rate from 4.8 percent to 4.2 percent, a revision that association executive Tim Gens said shows that the 3.9 percent 2015 growth rate might also be changed.
"The report demonstrates that aggregate health care costs are driven primarily by increased enrollment and rising pharmacy costs, not by payment to providers," Gens said in a statement Wednesday night, describing a "difficult period of transition" for hospitals who he says are facing further cuts in payments for care delivered to patients covered by public insurance programs.
According to the association, MassHealth policy changes that are being implemented will reduce funding to hospitals by up to $200 million a year. Combined with reduced reimbursements from other public and commercial payers, the cuts are forcing many hospitals "to assess employment and program cuts, especially since they have been given no reasonable amount of time to plan for the reductions," MHA President and CEO Lynn Nicholas said in a statement earlier this week.
Eighty percent of the 65 acute care hospitals in Massachusetts were profitable in 2015, according to a CHIA report released in late August. The statewide median total margin -- measuring the excess of total revenues over total expenses -- for Massachusetts hospitals fell to 3.7 percent in the 2015 fiscal year from 4.2 percent in 2014. The median margin for the state's nine teaching hospitals fell to 4.2 percent in 2015 from 8.2 percent in 2014, the report said.
A 23-member special commission will meet for the first time next Tuesday to begin studying variation in prices among health care providers in Massachusetts. By law, the commission must file any draft legislation arising from its recommendations by March 15, 2017.
Also, state officials on Oct. 17-18 plan to host their annual health care cost trends hearings at Suffolk University Law School in Boston. The hearings serve as a forum for experts and others to discuss cost drivers.
The CHIA report released Wednesday concluded that Massachusetts hospitals' performance on measures of effective clinical processes was similar to national performance and said the range of hospital scores on a patient safety composite measure narrowed from 2014 to 2015, but the number of hospitals that were lower performing on measures of health care-associated infections increased.
"Massachusetts acute care hospitals continue to perform similarly to hospitals nationally in both effective processes of care and patient experience," the report said. "Across hospitals and medical groups, there are opportunities for providers to reduce HAIs [health care-associated infections], continue reductions in the use of unnecessary interventions, improve care planning and discharges, and take further action to prevent hospital admissions for certain conditions."
In October, CHIA plans to offer an updated edition of "A Focus on Provider Quality," providing new information on "primary care effectiveness, as well as updated data on hospital mortality rates, hospital-based inpatient psychiatric care, and post-acute care in skilled nursing facilities and by home health agencies."
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