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Health Care For All Testifies at Annual Health Care Cost Trends Hearing

Health Care For All Testifies at Annual Health Care Cost Trends Hearing

October 6, 2017

On Monday and Tuesday this week, the Massachusetts Health Policy Commission (HPC) held its 5th annual Health Care Cost Trends hearing. Government officials, health care providers, insurers, and advocates came together to provide testimony and answer questions from the HPC commissioners on strategies to contain health care costs.

Below are some of the major themes from the hearing, a number of which were also reflected in Health Care For All’s testimony to the HPC. You can read our full testimony here.

Massachusetts is below the state benchmark for spending growth, but there is more work to be done:

Massachusetts successfully remained under the state benchmark for health care spending growth in 2016. As of 2014, Massachusetts health care spending growth was the fourth lowest in the nation. In 2015 and 2016, Massachusetts remained below the US average in health care spending growth.

However, major problems remain in our health care spending. In 2014, Massachusetts still spent the second most in the country on health care per person, exceeded only by Alaska. It is estimated that about 26% of an average Massachusetts family’s wages go towards health care costs. Families with a greater number of health issues tend to pay even more, and often have a difficult time affording care.

Commissioners emphasized that, while lowering growth rates to below the benchmark has been a success, much more work is needed to lower costs. Commissioners also made it clear that cost cutting measures shouldn’t impact access to care for Massachusetts residents.

Unnecessary Hospital Use and Readmissions:

One cost containment method identified repeatedly at the hearing was reducing unnecessary hospital use, particularly hospital readmissions. A readmission is when a patient returns to a hospital within 30 days of being discharged from a previous hospital stay. Data presented at the hearing showed that Massachusetts readmission rates grew between 2015 and 2016.

While decreasing readmissions would help to decrease overall spending, several panelists at the hearing pointed out the challenges of preventing readmissions. Particularly for patients with chronic conditions, readmissions may be a result of the illness and do not necessarily indicate errors on the part of the hospital. The question was also raised if reducing readmissions is the best strategy to support vulnerable populations. Some panelists cautioned against any strategies that would financially penalize patients who make multiple hospital visits within a short time period, as this could end up preventing these patients from accessing needed care.

Those suffering from addiction and those with behavioral health conditions were identified as groups more likely to have a readmission. Because of this, improving treatment for addiction and behavioral health was identified as one way to help lower readmission rates. One panelist commented that, when a patient is in the hospital for an overdose, they can be provided detox services, “but where do they go after?” Without adequate resources invested in treatment and recovery programs, people suffering from addiction may repeatedly return to the hospital. Commissioners also identified improved care coordination and engaging patients more actively in their care as a way to decrease unnecessary readmissions.

Social Determinants of Health:

Both commissioners and panelists identified social determinants of health as a key contributing factor to high health care costs. Several commissioners noted that there has not yet been enough done to invest in programs that focus on these social determinants.  

The importance of ensuring that communities have access to necessities such as nutritious food, transportation, housing and infrastructure was repeatedly stressed during the hearing. These resources allow communities to maintain better health overall and to access health care services when needed. One community health center CEO mentioned that a lack of transportation and infrastructure are major issues for patients, and that the health center provides transportation services to some patients to ensure they are able to access care. While a number of panelists and commissioners agreed that providers and payers should be doing more to invest in addressing unmet social needs, they also expressed concerns about how to do this without adding more money to the system.

One specific program mentioned during the hearing was the Prevention and Wellness Trust Fund. This fund promotes healthy behaviors, which helps to prevent illness and hospitalizations and improve health outcomes. The fund’s authorization expired this summer, and it has not been reauthorized in the current state budget. Health Care For All believes that allowing funding to lapse for this program is a shortsighted approach to containing cost, as the program will reduces overall cost in the long term by creating a healthier population which has less need for costly medical care.

Keeping Care in the Community:

The commissioners expressed some concern over a trend in which, after community hospitals are acquired by larger hospital systems, there is sometimes a shift in patients from the community hospitals to larger teaching and research hospitals in the same system. Concerns centered on the shift of patients away from community hospitals when they are receiving a treatment which could be provided at a community hospital at a similar quality of care. Generally, community hospitals offer less expensive services and treatments, in part because larger teaching and research hospitals use extra funds for education and research programs. Encouraging patients to seek care at community hospitals when appropriate is seen as a way to lower overall costs. This may also translate into lower out-of-pocket costs for patients, and they may have the ability to receive care closer to their home.

One of the reasons stated for the shift in care is the reputation attached to certain hospitals. Even though, for many treatments, care at community hospitals is of the same caliber as the care provided at teaching hospitals, patients will often assume that hospitals with more well-known reputations will provide better care. One way proposed to help keep care in community hospitals was to educate consumers that community hospitals provide high quality of care.

Prescription Drug Pricing:

Rising prescription drug prices were identified as one of the main drivers of increasing health care costs in the state. According to data from the HPC, 64% of health plans listed reducing growth in pharmaceutical spending as a top priority. A number of commissioners identified increasing transparency around the development of drug prices as a way to increase accountability in the pharmaceutical market, but commissioners also acknowledged the limits of state action to address rising drug costs.

Health Care For All supports legislation that would increase transparency around prescription drug pricing. Complex, hidden pricing programs make it incredibly difficult to know if consumers are receiving value for their purchases. Transparency would help both consumers and policymakers understand and accurately respond to the high prices of many drugs.

HCFA also supports academic detailing programs which provide evidence-based information to prescribers to help counter the marketing of drug manufacturers. Decision on prescriptions should be based on factual information around safety and effectiveness, not on the effectiveness of a marketing campaign.

Alternate Payment Models:

The commission discussed the implementation of alternate payment models (APMs) as a way to decrease costs and improve quality of care. Commercial insurers and state insurance programs have been moving to adopt APMs as a way to move care away from the current system of fee-for-service care, in which payment is provided for a service regardless of its effectiveness, to value-based payment models that would provide payment based on the quality and outcomes of care.

While there has been an increased adoption of APMs in Massachusetts, commissioners noted that there is still much work to be done to shift the health care system to these new models of payment. Panelists pointed out some of the challenges with implementing APMs. Some of the issues raised were the presence of national insurers in the Massachusetts marketplace who are largely still using the fee-for-service model; the hesitancy of some providers to shift to these new systems of payment; and a lack of clarity around what measures should be used to determine and reward the effectiveness of care. 


- Sean Connolly