Press Release  HPC URGES ACTION ON POLICY RECOMMENDATIONS NEEDED TO MEET THE COMMONWEALTH’S COST CONTAINMENT, CARE DELIVERY GOALS

Boston — The Massachusetts Health Policy Commission (HPC) today released its 2018 Health Care Cost Trends Report (available here and accompanying chartpack here) examining health care spending in Massachusetts in 2017 and the state’s performance against the health care cost growth benchmark. The report makes policy recommendations to address the continued high cost of health care in the Commonwealth.

“The recommendations released in today’s report should be a blueprint for the Commonwealth to carry on the significant progress already made in reducing health care spending growth and to face remaining challenges, such as increasing pharmaceutical prices and the utilization of higher-cost hospital outpatient settings,” said Dr. Stuart H. Altman, HPC Board Chair and health economist. “As the report highlights, affordability concerns persist and bringing relief for patients, families, and employers will take the determined effort and commitment of all stakeholders.”

The HPC set the 2017 target benchmark in per-capita Massachusetts health care spending at 3.6 percent. Overall growth in 2017 was 1.6 percent – a full 2 percentage points below the benchmark. In this year’s report, the HPC examines growth trends and presents research in key areas showing both continued challenges and opportunities for savings. These key areas focus specifically on the utilization of care, including the extent of unnecessary (“low value”) care provided to Massachusetts residents, the variation in hospital admissions from the emergency department (ED), the price of care, and variation in spending among provider organizations, broken down by both utilization and price.

Policy Recommendations to Advance the Goal of Better Care and Better Health at a Lower Cost for the People of Massachusetts

In the report, the HPC makes eleven recommendations to advance Massachusetts’ cost containment goals and improve health care in the Commonwealth. These recommendations require action by health insurers, providers, employers, policymakers, and other state agencies to accelerate the continued development of an integrated, patient-centered health care system.

Policy Recommendations to Strengthen Market Functioning and System Transparency:

1. Administrative Complexity: The Commonwealth should take action to identify and address areas of adminis­trative complexity that add costs to the health care system without improving the value or accessibility of care. Specific areas of focus should include complexity in payment arrangements, insurance billing and coding, risk adjustment, quality measurement reporting, pro­vider credentialing, and use of electronic health records.
2. Pharmaceutical Spending: The Commonwealth should take action to reduce drug spending growth, and focus specifically on establishing a pro­cess for rigorous review of high-cost drugs, increasing the ability of MassHealth to negotiate directly with drug manufacturers, increasing public transparency and oversight for manufacturers and pharmacy benefit managers, addressing price variation, and encouraging providers and payers to maximize value for patients through treatment protocols.
3. Out-of-network Billing: The Commonwealth should take action to enhance out-of-network (OON) pro­tections for consumers by requiring advance patient notification of a potential OON provider, establishing consumer billing protections in emergency and “surprise” billing scenar­ios, and setting a reasonable and fair reimbursement for OON services established through a statutory or regulatory process.
4. Provider Price Variation: Policymakers should advance specific, data-driven interventions to address the press­ing issue of continued provider price variation in the coming year.
5. Site-Based And Provider-Based Billing Reform: Policymak­ers and payers should act to limit both newly-licensed and existing sites that can bill as hospital outpatient departments and implement site-neutral payments for select services for similar patients. Outpatient sites that charge hospital fees should be required to conspicuously and clearly disclose this fact to patients, prior to delivering care.
6. Demand-Side Incentives: The Commonwealth should encourage payers and employers to enhance strategies that empower consumers to make high-value choices and to offer financial incentives (e.g., reduced premiums) for employees who choose primary care physicians affiliated with high-quality, efficient provider groups. Small business employers should offer employees a choice of plans and should strongly consider purchasing health insurance through the Massachusetts Health Connec­tor. 

Policy Recommendations to Promote an Efficient, High-quality Health Care Delivery System:

7. Unnecessary Utilization: The Commonwealth should focus on reducing unnecessary utilization and increasing the provision of coordinated care in high-value, low-cost settings. Payers and providers should reduce the use of avoidable high-cost care such as avoidable emer­gency department (ED) visits, behavioral health-related ED visits, readmissions, use of teaching hospitals and academic medical centers for community-appropri­ate inpatient care, and institutional post-acute care by ensuring access to high-value, low cost settings, and for shifting care, as appropriate, to these settings. Employers should continue to collaborate with payers, providers, and stakeholders to engage their employees and encourage them to seek high-quality, high-value care at appropriate settings.
8. Social Determinants of Health (SDH): The Commonwealth should take steps to address the social determinants of heath, specifically focusing on flexible funding to address health-related social needs, inclusion of social determinants in payment policies and performance measurement, continued evaluation of innovative inter­ventions to build the evidence base, and collaboration between health systems and community-based organi­zations and local municipalities.
9. Health Care Workforce: The Commonwealth should review and amend scope of practice laws that are restrictive and not evidence-based, including for Advanced Practice Registered Nurses (APRNs), certify a new level of dental practitioner to increase access to oral health care, particularly for low income and underserved populations, and continue to support new health care roles designed to meet the unique needs of the communities and patient popu­lations they serve such as community health workers (CHWs), patient navigators, peer support specialists, and recovery coaches.
10. Scaling Innovations in Integrated Care: The Commonwealth should continue to invest in testing, evaluating, and scaling innovative care delivery models to integrate medical, behavioral, and social care and enhance access for underserved populations. Specific areas of investment should include telehealth and mobile integrated health.
11. Alternative Payment Methods: The Commonwealth should continue to promote the increased adoption of alternative payment methods (APMs) and improve­ments in APM effectiveness, such as two-sided risk payment models (including global payment) for Medicare and Commercial members, following the lead of the Mass­Health ACO program. Payers should develop plans to lessen the unwarranted disparities in global budgets paid to different providers by establishing stricter targets for spending growth for highly paid providers, by moving away from historical spending as the basis of global budgets, and by using bundled payments for certain care episodes where evidence has shown effectiveness.

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