difficult to obtain Doctor visits, longer and more expensive hospital stays, rising drug prices, ballooning health insurance overheads and more are the topics of discussion at the annual hearing on this year’s rising health care costs, and others in the room There were voices of criticism.
As medical costs for Gulf residents have increased significantly over the past five years, finding legal solutions is a challenge as hospitals, insurers, patients, and businesses all have different priorities and ideas for lowering prices. It Is difficult.
A report released Wednesday estimates total health care spending in Massachusetts in 2022 at $71.7 billion, or $10,264 per resident, according to the Center for Health Information and Analysis. This is an increase of 5.8 percent on a per capita basis compared to 2021, which exceeds the baseline growth rate determined to be reasonable for the same year by the state Health Policy Commission (3.1 percent set by the commission). It was far superior.
Insurance companies, hospitals, long-term care providers, small businesses facing the burden of high insurance plans on their employees, and health equity advocates all testified at Thursday’s Cost Growth Benchmark hearing. He passionately argued that the price was high. It was too expensive—though they differed on who or what was to blame.
“We are committed to addressing the challenges Massachusetts faces in terms of access to care caused by unequal incentives, workforce challenges, and system bottlenecks,” said Alex Sheff of Healthcare for All. We must face the pressing challenges facing the world.”
Sheff said states need to focus on changing resource allocation and payment structures for primary care and behavioral health to increase access to primary care and reduce pressure points in emergency departments and hospitals. He said there is.
Health Policy Commission Director David Seltz said during the hearing that more people have turned to hospitals for care needs that could have been addressed by going to their doctor during the pandemic. At the same time, primary care is shrinking.
Selz said fewer residents are choosing internal medicine or family medicine because the benefits are lower than in specialty medicine.
“Massachusetts spent 7 cents of its health care dollars on primary care, and that share is decreasing. I think the funding needs to change,” Seltz said.
More and more people are relying on hospitals rather than doctors, and the number of people staying in hospitals for long periods of time is increasing due to a shortage of nurses in hospitals due to staff shortages, and delays in outpatient treatment. According to the HPC, between 2020 and 2023, the percentage of emergency department patients who were hospitalized for more than 12 hours increased from 6.1 percent to 10.2 percent.
Hospitals and commercial health insurance plans negotiate the price of care for their insureds, and often blame one side when the issue of rising costs arises.
From 2021 to 2022, premiums for commercially insured residents will increase by 5.8%, while costs such as copays, coinsurance and deductibles will also increase, according to a study by the Center for Health Information Analysis. It increased by 6% and was on an increasing trend.
Nearly half (42.4%) of Bay Staters with private insurance will still have a high deductible plan in 2022, and 31.2% will be unable to meet their family’s medical needs due to high costs. I answered no.
Meanwhile, health plans’ net worth has ballooned during the pandemic, increasing 20% from 2019 to 2022, according to the Massachusetts Hospital Association. Insurers said the increase in net assets was due in part to a strong stock market, providing stability in uncertain times, especially after insurers gave payers a break during the COVID-19 pandemic. He argues that surpluses and reserves are important for this purpose.
HPC also reported Thursday that administrative costs for health insurers have increased by more than 50% since 2017.
Asked about the increase in administrative expenses, Elizabeth Leahy, senior vice president of advocacy and engagement at the Massachusetts Association of Health Plans, said the expenses are driven by inflation, payroll demands and investments in IT infrastructure.
“That administrative spending also includes everything health plans must do to meet the needs of consumers as directed by Congress. For example, there is a law that requires the establishment of a robust provider directory. We have requirements around automating pre-authorizations, we have requirements around how claims are routed and sent to people, and that requires a significant IT investment,” says Leahy.
Leahy pointed to health care providers and urged lawmakers to rein in hospitals, which have the highest costs.
“We regularly hear from health plan CEOs about negotiations with hospitals and providers seeking rate increases of 20 to 30 percent or more each year.Recently, provider groups have sought rate increases of 50 percent. I heard an anecdote about it,” she said.
Steve Walsh, president of the Massachusetts Health and Hospital Association, said hospitals have yet to recover from the COVID-19 pandemic.
Walsh said the state’s health care landscape is in a “moment of deep crisis, deep vulnerability and extraordinary change,” as health care providers are still trying to make up for losses incurred in the pandemic and the labor pressures that have devastated the industry. He said he was trying to recover from his lack of strength. .
“As you consider the thousands of metrics included in CHIA and HPC’s annual reports, we ask you to think about and keep in mind some of the metrics that really matter. 19,000 jobs. 1,500 patients are locked up in hospitals without the specialized care they need. 1 in 7 people. [medical surgical] Currently, patients who do not require acute level of treatment are secured to their beds but cannot be moved. “At this time, all five regions of the state are at high risk due to capacity constraints, the immediate future of nine local hospitals is in doubt, and 20% of behavioral health beds are offline due to staffing shortages,” Walsh said. he said.
He added that “100% of hospitals” are “becoming financially weaker by the day.”
David Auerbach, HPC’s senior director of research and cost trends, said the number of people employed in all long-term care facilities is 20 percent below pre-pandemic levels.
Thursday’s hearing was an annual event held to inform the Health Policy Commission’s fiscal year 2025 health care cost growth benchmark. Regarding this metric, some lawmakers and industry representatives are questioning whether it is actually beneficial to set a forward-looking goal of “no growth.” It has no teeth to actually curb spending. The growth rate is normally set at 3.6%.
Walsh strongly criticized whether the standard, created by a 2012 law, was effective.
“The statutory debates taking place here today, at this moment, are a relic of the past and no longer serve patients. To build an innovative, sustainable, patient-centered system for the future Let’s cooperate,” he said.
Insurers emphasized the need for such a measure, saying it would give them more leverage in negotiations with hospitals.
“Without strong benchmarks and accountability to those benchmarks, health plans will have little power to limit provider rates without cost sharing, especially for prescription drugs,” Leahy said. said.
Meanwhile, small business groups say their companies and their employees are bearing the ever-increasing costs as hospitals and health plans disagree.
John Hurst, president of the Massachusetts Retailers Association, has spoken in the past about small businesses being disproportionately affected by the “death spiral” of rising care costs.
The insured population in Massachusetts’ small group market (for businesses with 50 or fewer employees) has declined significantly over the past few decades as employees transition to spousal plans and public insurance options. The number of older employees remaining is decreasing. You tend to have more health problems and have to pay more.
“We come before you today because, rather than maintaining the baseline of 3.6 percent, we are asking you to lower it again to 3.1 percent, because, frankly, 3.6 is not working. Because we haven’t,” Hurst said Thursday. “Providers are ignoring it. They can ignore it because it’s toothless and there’s no repercussions. They’re trying to get away with it.”
One of the biggest jumps in healthcare spending is the cost of prescription drugs.
Prescription drug spending grew 10 times faster from 2019 to 2022 than from 2017 to 2019. By comparison, office, urgent care, and retail clinics actually experienced declining cost increases over the past three years of available data.
The HPC recommended that policymakers do more to oversee drug spending, as it is a major and growing expense for families.
