together with With the start of a new year, many people will be making new resolutions or tackling last year’s unfinished business. For state leaders, this should include passing a comprehensive health care bill to address the spiraling affordability crisis.
Speaking at the Massachusetts Retailers Association’s annual meeting in late November, Governor Healey announced his early New Year’s resolution, pledging to make addressing health care affordability a priority.
Two separate bills passed by the state Legislature in late December and signed by Mr. Healey last Wednesday require the State Health Policy Commission and the Attorney General to check on harmful market takeovers and expansions and provide much-needed guidance. It includes provisions that give it more power to advance health care plans. Limiting cost sharing and copayments for certain chronic disease medications, etc.
While these measures have clear value, this bill does not provide clear relief for the most important health care challenge facing Massachusetts: the affordability crisis.
As employers and consumer representatives, we do not agree on every health care issue, but we are not satisfied with the limited scope of these two bills and urge the Governor to: We urge you to join forces to fulfill your promises. meaningfully address the unsustainable trajectory of health care costs in the state;
The good news is that the Health Policy Commission has provided a strong roadmap to get there.
According to HPC data, increased hospital spending and drug spending, both of which are fueled by price increases, are the main cost drivers for Massachusetts’ health care system. The governor’s health care bill in 2025 must address these two issues to make real progress on affordability.
When it comes to hospitals, we have to change the way we pay for treatment. Although provider consolidation has continued unabated over the past two decades, the cost-saving promises of integrated accountable care organizations have not materialized.
This consolidation has tilted the needle in favor of larger hospital systems in negotiating appropriate reimbursement rates with insurance companies, increasing the cost of treatment for commercially insured patients.
Therefore, legislation must address provider price variation, both differences in hospital prices for the same service and differences in the cost of care depending on the setting in which it is provided. Healthcare consumers should not pay more for an MRI at a hospital than at an imaging center.
Also, if a hospital refuses to agree to reasonable pricing terms with an insurance company, the default network ensures that the hospital cannot flip out and charge exorbitant amounts for certain services. External payment levels also need to be established by law.
Meanwhile, we continue to use a fee-for-service payment model, rather than a model that incorporates capitation or the use of global hospital budgets. In this model, providers are paid a fixed amount upfront to cover medical costs, and sometimes bonuses are added for improved health outcomes. . Evolving to these new payment schemes will require insurers to phase out payment schemes built primarily on fee-for-service.
Hospitals should also be at financial risk due to their high pricing and contribution to increased spending. One way to achieve this is by directly targeting more rigorous performance improvement plans where price increases drive inappropriate spending and ensuring that per capita spending growth consistently exceeds benchmarks. consider greater penalties for hospitals or physician groups that do so.
We also need to place more emphasis on primary health care and mental health care, and less emphasis on specialty health care providers, to improve access to these critical services for much of the population. . We need to rein in high-cost hospital and specialist payments and redirect those savings to primary care and behavioral health within cost benchmarks. Governor Baker proposed legislation to accomplish this while in office. Well worth doing this again.
When it comes to drug costs, we appreciate the recent legislation requiring drug benefit managers to participate in the Health Policy Committee’s annual cost trends hearing. On the other hand, capping out-of-pocket costs for people with certain chronic conditions (risk factors for cardiovascular disease such as diabetes, asthma, and high blood pressure) would certainly be welcomed by some patients.
But there is no free lunch. Although this is well-intentioned, it may increase total drug spending as more people take advantage of these drugs. Any savings for people with chronic illnesses will be passed on to businesses and their employees in the form of higher premiums.
More determined efforts are needed to find ways to reduce the absolute price level paid for branded medicines. A notable model may be the approach taken by Maryland. Prescription Drug Affordability Committee To control the rise in prices of over-the-counter drugs.
We also need to take a hard look at the strategies implemented in 2012 to slow overall growth in commercial health spending: the creation of a health policy commission and the establishment of annual health spending growth benchmarks.
More than a decade later, it has become clear that this is an inadequate approach to managing health care costs in a meaningful or sustainable way. Health care costs have grown faster than inflation and wage growth for most of this period, and have accelerated even more recently, with Massachusetts now having the second-highest average family health insurance premiums in the nation, and an annual It’s over $30,000.
The bill signed last week would allow the Department of Insurance to review and, in some cases, reject submissions of health insurance policies that propose excessive premium increases or that the agency deems unaffordable to consumers or purchasers. In this regard, he has taken on a larger role. If properly implemented, this could potentially reduce cost increases and give insurers more leverage to counter unreasonable rate demands.
While high insurance premiums affect all businesses, small businesses are especially hard hit for two reasons.
First, large businesses tend to be self-insured and are not subject to the many health care mandates that Massachusetts imposes on the fully insured market, where most small businesses are covered.
Second, those who are self-insured are often able to redesign their own benefit packages to better control costs.. When small businesses face these high cost burdens, many are forced to cut benefits, pass more costs on to employees, or both. First, lawmakers should suspend mandates for additional expensive health insurance to avoid additional premium burdens on small businesses and their employees.
The governor’s promise to address health care market reform by 2025 is an ambitious goal. But just because something is difficult doesn’t mean it can’t or shouldn’t be done. Like the person who decides to lose 10 pounds each new year without success and then has to lose 50 pounds all at once, health insurance insolvency for small businesses and their employees has reached a crisis point, and bold intervention is required.
Keeping your New Year’s resolutions will be easier if you have the support and cooperation of others. The impending health care cost crisis certainly requires such an approach.
In writing this article together, we aim to demonstrate that employer and consumer health care advocates are working together to address the state’s affordability crisis. Governor Healey should follow through on his promise in a similar spirit by calling on all health care professionals to come together to craft legislation that will bring about meaningful change in addressing this urgent issue.
Eileen McAney is Chair of the Health Employers Federation. Paul Hattis is a senior research fellow at the Loan Institute.
