THOUGH MASSACHUSETTS TAKES a particular pride in its long commitment to providing access to health care coverage for its residents, rising costs across the health care sector are squeezing individuals and businesses alike.
“I do feel like we are at an inflection point of this health care reform journey,” David Seltz, executive director of the Massachusetts Health Policy Commission, said on The Codcast, “and that there needs to be action to update the tools and levers in order for us to maintain our position as a national leader.”
Seltz is the first and only executive director of the commission, an independent state government agency established in 2012 that makes policy recommendations regarding health care delivery and payment system reform. In a discussion with John McDonough of Harvard’s T.H. Chan School of Public Health and Paul Hattis of the Lown Institute, Seltz laid out a bracing vision of health coverage in the Bay State.
Seltz said testimony at the annual cost trends hearing this fall “was both powerful and sobering,” revealing that many Massachusetts families are facing difficult trade-offs in essential expenses including health care.
“We started this journey in Massachusetts really around health care access and universal access to care,” Seltz said. “And we made that a centerpiece in Massachusetts of our reform in 2006, to get everyone into affordable health insurance. And what we’re seeing today is that even for people who do have health insurance, they’re unable to afford the care that they need.”
Surveys over the past few years have found residents more concerned with the cost of care than quality of care, with health care spending increases in the state outpacing the national benchmark.
Seltz noted that red and blue states alike are advancing bills focused on the rise in cost of prescription drugs, which is the fastest growing category across all sectors of health care spending. Almost 30 states have laws on the books as of fall 2023 to address prescription drug pricing, including oversight of pharmacy benefit managers. Earlier this year, Minnesota became the seventh state to establish a prescription drug affordability board, and Seltz said he is “optimistic that next year Massachusetts will join many of these states who have already taken action on this issue.”
The Health Policy Commission is also considering changes to the health care cost-growth benchmark – which Seltz describes as a statewide measure of total health care expenditure growth across all health plans – to “modernize and strengthen our approach,” as some providers push to raise costs beyond the 3.1 percent annual growth allowed.
Seltz said the commission may update metrics to identify health care providers for potential review. The review process could also account for contextual differences like baseline spending, baseline pricing, and the population served. Finally, Seltz said, the commission thinks the list of health care entities in discussions about exceeding the benchmark should become public.
“Originally in our law, that was set as a confidential list that the HPC reviews every year, and I think there was an appropriate concern that entities, if their names were shared publicly, that the data may not be reliable enough and that organizations could be kind of misidentified in a public way that would have negative consequences,” Seltz said. “Well, we’re 11 years into this. We have 11 years of experience of looking at this data and understanding this data and being able to contextualize this data. Why is this being kept from the public conversation?”
Massachusetts could take a cue from other states in incentivizing keeping costs below the benchmark by raising financial penalty amounts, and creating a more comprehensive framework for setting goals and tracking progress in affordability and health equity, Seltz said.
Along with its health care pricing role, the commission can also decide whether to review the cost and impact of major shifts in the industry such as the planned Dana-Farber Cancer Institute and Beth Israel Deaconess Medical Center partnership. Seltz expects a decision on the review early in 2024.
McDonough pointed to the shrinking small-employer health insurance market – companies under 50 employees who are providing health insurance to their workers – which covers almost 300,000 fewer people than it did a decade ago. For retailers, McDonough said, “this is a hair-on-fire moment, and it seems to me to be akin to a market collapse.”
Seltz said this “very striking and very concerning” shift is largely because employers are increasingly choosing not to cover their workers because of the costs, or shifting to high-deductible plans where employees have to shoulder more of the cost burden.
“The declining enrollment, I don’t know that I would say it is in collapse, but it is maybe collapsing or at least in a spiral,” Seltz said. To turn it around or stabilize the spiral, he said, “we need to do the other recommendations that we have, that actually get at the underlying drivers of health care costs. So let’s look at provider pricing, let’s look at hospital facility fees, let’s look at health plan oversight. Let’s look at all of these things, which we know are kind of the key to moderating the underlying drivers of cost growth.”