It comes down to the post-pandemic recession.
The roughly $9 billion price tag associated with Rhode Island’s health care spending in 2022 was an increase of 1.6% per capita compared to 2021.
That’s half the growth rate from the previous year and safely below the 3.2% standard set by a state commission focused on tracking health care costs, the paper said. Report released on Monday By the Office of the Director of Health Insurance.
But like many analyzes thrown into balance by the pandemic, year-over-year comparisons of state health spending don’t tell the whole story.
“There are a lot of anomalies in the data as a result of COVID-19, and we need to understand the situation,” state Health Insurance Commissioner Cory King said in an interview.
In fact, per capita health spending in Rhode Island decreased by 2.9% from 2019 to 2020. In 2021, pent-up demand spilled over as patients flooded hospital rooms and clinics to complete elective procedures and routine tests that had been postponed due to the coronavirus. Pandemic.
By 2022, the surge had leveled off, and annual spending increases by private insurers and government-funded programs were less severe, the report said.
Total reported health care spending in 2022 was $8.92 billion, equivalent to $9,313 per person.
Beware of Big Pharma
King predicts future problems as inflation, a shortage of medical providers and expensive drugs loom over Rhode Island’s health care landscape.
“We expect spending to be even higher in 2023,” he said, adding that he “would not be surprised” if future data showed a baseline annual growth rate above 3.2%.
The biggest problem, Dr. King said, is drug costs, which are already rising at an alarming rate because they are largely controlled by federal regulations, with little opportunity for mitigation at the state level.
“We characterize rising prescription drug costs as a threat to affordability,” King said. “This prevents other opportunities to invest in our system delivery.”
In other words, drug companies’ response to drug price increases takes money away from government and private insurance companies and their patients who would otherwise have to pay more to attract and retain health care providers, for example. may be spent on.
State lawmakers are considering successive policies It aims to reduce access to and costs of prescription drugs. But Dr. King was skeptical that any state-level policies could counter the fight by Big Pharma.
“They’re going to sue every time,” he said.
Outpatient services improved
King, powerless when it comes to drug prices, emphasized the importance of cutting costs in other areas. One area where the state has already seen some success is reducing inpatient visits by offering similar services in outpatient settings.
According to the report, inpatient medical costs decreased by 5.4% in 2022, while outpatient medical costs increased by 4.4%.
This trend has been driven by new technology and equipment that allows hip and knee replacement surgeries to be performed on an outpatient basis rather than in a hospital setting.
“These surgeries are among the most expensive outpatient procedures, but they cost significantly less when performed on an outpatient basis rather than an inpatient basis,” the report said.
King cited the growth of outpatient services as a prime example of how efficiency can reduce costs without compromising services. Another avenue for potential relief is reinstating eligibility screening for Medicaid patients.
Managing the Medicaid Monster
In 2020, the federal government stopped states from cutting off government-subsidized health services to ensure people continued to have access to critical health services during the pandemic. But some of those Medicaid patients became eligible for other forms of insurance, such as moving to other states, dying, or joining Medicare at an older age.
The report noted that Rhode Island’s per capita spending on Medicaid increased by 3.1% from 2021 to 2022, reflecting in part the federal government’s continued coverage requirements. States, including Rhode Island, are beginning eligibility reviews in 2023, and eliminating ineligible patients could reduce per capita costs in coming years, King said. .
Per capita commercial health spending increased by 3.3% in 2022, and Medicare spending increased by 1.8%, according to the report.
Rising costs associated with the state’s Medicaid program, which already accounts for a third of the annual budget, have become a top concern for lawmakers.At the same time, lawmakers and Gov. Dan McKee proposed a 2025 budget. Proposal including phased introduction Increased fee reimbursement for certain Medicaid providers, citing the need to bring Rhode Island’s rates on par with neighboring states.
Dr. King supported the proposed increase. September 2023 Report The author is OHIC.
These rate increases do not address the state’s primary care shortage, which remains the biggest concern of health experts and lawmakers. However, Mackie April 8th budget revision We proposed adding primary care services to the scope of OHIC’s biennial rate review. Law introduced in March Senate Majority Leader Ryan Pearson, a Cumberland Democrat, would achieve a similar result.
the king you have credited It supported OHIC to enhance information gathering and transparency through public dashboards and welcomed the prospect of more data. But he did not support another bill aimed at bringing Rhode Island provider rates in line with neighboring New England states.
Companion bill, Sponsored by Sen. Susan Sosnowski, D-South Kingstown, and Rep. Theresa Tanzi, and with oversight and review by OHIC, it would create a minimum provider rate in Rhode Island based on average rates in Connecticut and Massachusetts. Set.
“This is the same as telling a Providence public school teacher who rents an apartment in Providence’s West End to pay rent to Boston for that Providence apartment,” King said.
“I’m not opposed to rate hikes, but that’s not a good framework,” he added.
Another area where Dr. King supported increased spending is mental health services. The report found that per capita spending on mental health in commercial markets has increased “explosively” over the past five years, with a 70% increase for children and youth from 2018 to 2022 and a Among adults, the number increased by 60%.
“This is actually being driven by increased usage, which I think is a good thing,” King said.
The rise of telemedicine during the pandemic, coupled with the temporary relaxation of interstate licensing rules that allow health care providers to treat patients in other states, has increased overall ease of access to health care, including mental health services. became.
Building on the successes demonstrated during the pandemic, state lawmakers have since pass a law, This will come into effect on July 1, 2023 and will be Psychology Interjurisdictional Agreement.
What about the Centurion sale?
Hover your mouse over the newly released report from OHIC. pending sale Roger Williams Medical Center and Our Lady of Fatima Hospital.
Atlanta-based nonprofit organization The Centurion Foundation provided: $80 million According to an application filed with the Rhode Island State Department, the hospital will acquire two hospitals and associated physician groups, home care and hospice agencies and offices, and bring in much-needed equipment and staff. The company said it has committed to adding an additional $80 million to its balance sheet. Attorney General and Rhode Island Department of Health. The two state agencies that must approve hospital sales that involve conversion to nonprofit ownership have until June 11 to approve, deny or impose conditions on the sale.
King said he doesn’t know enough about the terms of the proposed agreement to say how it would affect hospital costs and spending.
However, the threat of closing two community-based hospitals is a possibility given the financial difficulties of their current owners, including nearby Rhode Island Hospital and Miriam Hospital (both owned by Lifespan Corporation). There is a risk that resources will become strained. Lifespan Providence Hospital has higher per-patient costs for both inpatient and outpatient services compared to Roger Williams Hospital and Fatima Hospital, according to data included with the Rhode Island Foundation.Commissioned research announced in April.
For the first time, this year’s OHIC report includes recommendations to strengthen health performance and oversight. they are:
- Invest in primary care and community-based health care providers
- maintain Office affordability standards Regulate hospital price increases
- Publish more consumer-focused medical cost analysis
- We collect, analyze, and publish data on healthcare provider finances, operating costs, and physician practice group acquisitions.
