A state agency is warning that Massachusetts runs the risk of letting its health care system become “increasingly unaffordable” and more inequitable without further action to control costs, citing new findings from its annual report.
The Health Policy Commission was created under a 2012 law aimed at reining in rising health costs, and lawmakers tasked the agency with monitoring medical spending and recommending ways to stem the annual increases.
Ten years later, the HPC says it’s time for the state government to step up its cost-control strategies and confront persistent challenges like rising insurance premiums, health care market consolidation, disparities in access, growing and varied prices charged by medical providers, and high drug prices. The commission on Tuesday released a new report recommending a suite of steps it said lawmakers should take when their new session starts in 2023 to boost oversight and accountability.
“We believe that urgent action is needed by policymakers to strengthen and evolve our approach, or else we will continue to have a health care system that is increasingly unaffordable for Massachusetts residents and businesses and that will contribute to growing health inequities,” said David Seltz, the commission’s executive director.
In its annual report examining health care cost trends, the Health Policy Commission found that while total health care spending dropped in 2020 — as people sought less care during the first year of the COVID-19 pandemic — that decline did not translate to “proportional cost relief” for residents with commercial health insurance. The average cost of health insurance for a Massachusetts family totaled $22,000 that year, including both the portion paid by the employee and their employer.
The report keyed in on affordability challenges for a family of four earning more than $83,000 but less than $139,000 a year, an income level that would generally leave them ineligible for coverage through MassHealth or big insurance subsidies through the Massachusetts Health Connector.
According to the report, a Worcester-area family in that income bracket “would have their entire income absorbed by housing, child care, food, transportation, health care and other necessities with no money left over for emergencies, one-time expenses or other discretionary expenses such as vacations.” A similar family in the Boston area would be in the red by more than $1,500 each month.
On average, the cost of health care (including premiums and out of pocket costs) and other household expenses exceeds the income of middle-class families in the Boston area. pic.twitter.com/2IuoZ7j3LF
— MA Health Policy Commission (@Mass_HPC) September 27, 2022
David Auerbach, the HPC’s research director, called those findings “kind of a warning signal to us that, ‘Wow, affordability is seriously challenged.’”
Among other steps, the commission recommends that the state government set caps for the growth in hospital prices, enhance its data collection and oversight around prescription drug prices, give closer scrutiny to expansions by major health care providers and set measurable goals for advancing health equity.
The commission also recommended putting more teeth into the performance improvement plan process that it can use to push for changes when a hospital or insurer reports spending growth that exceeds the state’s targets.
Tuesday also marked the body’s approval of the first performance improvement plan commissioners have ever required from an entity. Under the plan, the Mass General Brigham system agreed to reduce its annual medical spending by $128 million, including $90 million in price reductions.
“This is one important intervention and set of actions, but this does not solve our concern about the outlook,” commission chair Deb Devaux said of the performance improvement plan.
While state lawmakers this session passed bills focused on access to reproductive and behavioral health care, Democrats in the House and Senate have struggled in recent years to find consensus on other health care reforms. The House passed a hospital expansion oversight bill last November, and the Senate approved a drug pricing reform bill in February but, without a vote in the other branch, neither piece of legislation made it over the finish line before formal sessions ended for the term on July 31.
Health and Human Services Secretary Marylou Sudders noted that some of the commission’s recommendations align with measures in a bill that Gov. Charlie Baker has twice filed, which seeks to drive investments in behavioral and primary health care. A new governor and Legislature will be sworn in next January, but Sudders said she said she hopes there will be an opportunity early next year “to take up some of these important issues around costs and quality that affect all of us who live in the commonwealth.”
Seltz said the wide variety of stakeholders and different interests makes passing health care legislation a complicated endeavor.
“However, the facts speak for themselves. Nearly 50 percent of Massachusetts residents said that they deferred necessary care because of the cost of the care,” he said. “I think our message is strongest when it’s the people’s message. The message is that people are struggling to afford health care, and that struggle is disproportionately borne by some populations and leads to worse health outcomes and worse financial distress.”
