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Massachusetts health care — wonky, with a healthy dose of reality

HPC: Yes, Glass Half Full/Half Empty. But Costs Under Control, For Now

HPC: Yes, Glass Half Full/Half Empty. But Costs Under Control, For Now

December 17, 2014

Today the Health Policy Commission held a lengthy, end-of-year meeting (meeting slide deck here) summing up the year and discussing a wide variety of topics, including a year-end summary of the work of the Office of Patient Protection and updates on the medical home and ACO standard process. It was also announced that the first meeting of the "Essential Services Task Force," made up of state officials and charged with looking at the issues of hospital and service closures, will occur on December 18.  

The highlight was the release of select findings of its upcoming cost trends report, due to be released at its next meeting, on January 20. The Commission also issued a press statement with the key points of today's release. Here's their good news/bad news headline and subhead, which neatly ties up the findings released today:

Health Policy Commission Finds Health Care Cost Growth in Mass. is Slowing

Identifies further areas of opportunity for enhancing the transparency, quality, and affordability of health care system

The good news is that Massachusetts spending growth is the lowest in many years:

HPC spending trends 12-17-14

The presentation breaks down spending growth in 2013 by payer, like commercial insurers (growing at just 1.7% per person), and Medicare and Medicaid growth rates. For MassHealth, our Medicaid program, per-member spending by the managed care organizations went up 3.9%, while spending growth in the primary care clinician fee-for-service program grew by 2.6%.

The question, not answerable yet, is whether this trend is a temporary blip, or represents a fundamental change. Commission Chair Stuart Altman warned that he has seen costs go up and down in many cycles over the past.

The presentation also looked at the other side - the areas where needless spending continues. They looked at five areas where opportunities for progress should be addressed:

  • Variation in Cost of Common Treatments: For three common procedures (knee replacement, hip replacement, and angioplasty and stents), hospitals vary widely in health spending across an episode of care – driven by procedure price – without clear differences in quality. The HPC finds that opportunities exist to reduce spending by shifting site of care to lower cost settings such as community hospitals or lower cost specialty facilities, or by increasing efficiency and reducing price within existing settings.
  • Post-Acute Care: Wide variation exists in discharge practice patterns among Massachusetts hospitals, both in total discharge to post-acute care and the balance between home health and institutional settings (such as skilled nursing facilities). While the “right” levels of post acute care use are not clear, variation between Massachusetts and the U.S. – and between Massachusetts hospitals – shows need for focus on optimal care.
  • Wasteful Spending: Building upon its 2013 estimate that 21 to 39 percent of all health care spending could be considered wasteful, the HPC focused on opportunities in avoidable readmissions and avoidable emergency department visits as areas for improvement in care delivery. The HPC finds that almost half of Massachusetts ED visits were avoidable in 2012 and that Massachusetts has substantial opportunity to reduce unnecessary readmissions, where the state continues to fall short of national benchmarks.
  • High-Cost Patients: Because 5 percent of commercial patients account for 45 percent of commercial medical spending, the HPC conducted a first-of-its-kind cluster analysis of Massachusetts claims data, identifying segments of high-cost patients. The results reinforced a focus on behavioral health, and managing chronic conditions such as asthma.
  • Behavioral Health: The HPC continues to identify challenges in behavioral health that pervade the health care system, and identifies areas for improvement that include the advancement of integrated clinical models within patient-centered medical homes and accountable care organizations, the alignment of financial incentives to support these care models, and improved transparency through the collection and public reporting comprehensive data.

Lots and lots of great stuff here. If you have even a smidgen of health wonk in you, go look at the presentation.

   - Brian Rosman