News  HPC SETS HEALTH CARE COST GROWTH BENCHMARK AT 3.1% FOR 2020

Boston — The Massachusetts Health Policy Commission (HPC) today set the Massachusetts Health Care Cost Growth Benchmark for calendar year 2020 at 3.1%, the lowest rate allowable by law. The HPC held a public hearing regarding the potential modification of the benchmark on March 13, 2019, with members of the Joint Committee on Health Care Financing (HCF) to examine recent data around cost growth and received testimony from 16 organizations. The HPC has limited authority to modify the benchmark to between 3.1% and 3.6%.

“While there was broad consensus to set the benchmark at 3.1%, high costs and affordability issues remain critical challenges in Massachusetts. This 3.1% figure may not adequately reflect the changes that have happened in health care spending more recently, including that the rate of growth nationally has been much lower than in previous decades,” said Stuart H. Altman, HPC Board Chair. “It may be time to consider whether additional flexibility is warranted for the HPC to set the benchmark lower than 3.1%.”

The public hearing provided the HPC and state legislators with available data, information, and testimony regarding the potential modification of the Health Care Cost Growth Benchmark. The HPC collected testimony from a broad spectrum of interested stakeholders of health care providers, health plans, employer associations, and consumer advocates. The majority (11 of 16) testified in favor of the setting the benchmark at 3.1%, while the remainder did not take a position.

“The Health Care Cost Growth Benchmark is a vital tool in the Commonwealth’s efforts to control the growth of total health care expenditures and serves as an annual measuring stick for those efforts,” said David Seltz, HPC Executive Director. “Since the inception of all-payer health care oversight, Massachusetts has seen success in spending under the target and its efforts have been noticed across the country, as many other states have begun to establish their own benchmark. The HPC will work with its partners to continue this success and create a health care market that works for all.”

The benchmark is a target for controlling the growth of total health care expenditures across all payers based on the state’s long-term economic growth rate as measured by potential gross state product, or 3.6%. Based on their individual spending, the HPC can require individual health care providers or health plans to implement Performance Improvement Plans and submit to strict monitoring. This is the third year that the HPC has the authority modify the benchmark, pursuant to a public hearing process and engagement with the state Legislature. The HPC must establish the health care cost growth benchmark annually by April 15.