For Immediate Release - August 14, 2013

THE CENTER FOR HEALTH INFORMATION AND ANALYSIS RELEASES ANNUAL REPORT ON THE MASSACHUSETTS HEALTH CARE MARKET

Boston—Wednesday, August 14, 2013—The Center for Health Information and Analysis (CHIA) today announced the release of its first Annual Report on the Massachusetts Health Care Market.  The report, mandated by the Commonwealth’s 2012 health care cost-containment law, examines trends in the commercial health care market between 2009 and 2011, including changes in premiums and benefit levels, spending and retention, and market concentration.

“CHIA’s mission is to monitor the Massachusetts health care system and to provide reliable information and meaningful analysis for those seeking to improve health care quality, affordability, access, and outcomes,” said Executive Director of CHIA Áron Boros.  “This report marks the latest step in achieving that mission, increasing transparency in our health care system and empowering policymakers and regulators to make the best data-driven decisions possible.”

Among the report’s findings was that health coverage available through Massachusetts employers in 2011 cost more and had a lower benefit value for consumers.  Between 2009 and 2011, premiums rose by 9.7% to pay for benefits that decreased by 5%; and deductibles grew in Massachusetts by more than 40% between 2009 and 2011, approaching the national average. 

The report also found concentration in the commercial health care insurer market, with a few larger payers accounting for the majority of enrollees.  During the years studied, Blue Cross Blue Shield (BCBS), Harvard Pilgrim HealthCare, and Tufts Health Plan made up nearly 80% of the commercial payer market, with BCBS alone accounting for 45% of that market.

Spending for member care rose 3.8% between 2010 and 2011, to $414 per member per month.  There has been some transition from fee-for-service to alternative payments, but only in commercial HMO products.  In 2012, 39% of total commercial payments were made within a global payment/budget framework, while the majority of payments were still made using the fee-for-service method.  National benchmarks on these measures are limited, but Massachusetts appears far ahead of most other states in adoption of alternative payment methods.  Catalyst for Payment Reform reports that nationally only 10.9% of payments are “value-oriented.”  At the same time, enrollment in HMOs in Massachusetts dropped from 63% in 2011 to 59% in 2012.

The report found that the majority of commercial health care payments continue to be made to high priced providers.  In 2011 and 2012, roughly 80% of health care spending for acute hospitals and physicians was concentrated in providers with prices above the network median.  Additionally, most commercial payments went to a few large provider systems.  Partners HealthCare System received close to three times the amount paid to the next largest system, CareGroup.  Partners received approximately one-third of all payments to acute hospitals, another third went to all other hospital systems combined, and the remaining third was paid to all hospitals not affiliated with a system.  Of total physician group payments, Partners accounted for nearly one-quarter, almost 2.5 times higher than the second largest physician group, Atrius Health.

The provisions under the 2012 health care cost-containment law were designed to promote more cost-effective, integrated, high-quality care for all of Massachusetts.  The findings of this report precede the passage of this law.  The Center for Health Information and Analysis will continue to assess the impact of these programs on public and commercial market health care trends.

The findings of the Annual Report will inform the Health Policy Commission’s annual health care cost trends hearing.  Held on Tuesday, October 1 and Wednesday, October 2, at 9:00 a.m. at the University of Massachusetts Boston Campus Center, the hearing will allow the Commission to publicly engage experts and witnesses to identify particular challenges and opportunities within the Commonwealth's health care system and better inform policies designed to curb increases in health care costs for Massachusetts residents and employers.

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The Center for Health Information and Analysis (CHIA) was established as an independent agency of the Commonwealth of Massachusetts by the 2012 Massachusetts health care reform law.  The mission of CHIA is to monitor the health care system in Massachusetts and to provide reliable information and meaningful analysis for those seeking to improve health care quality, affordability, access and outcomes in the Commonwealth.  CHIA also acts as the principal repository for health care data collected by the state and is responsible for maintaining such data in a secure payer and provider claims database, known as the All Payer Claims Database.  Prior to the 2012 law, many of the functions and responsibilities of CHIA were performed by its predecessor agency under the Executive Office of Health and Human Services, the Division of Health Care Finance and Policy.  


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