Massachusetts is required to release annual Cost Trend reports that make recommendations and commitments to advance Massachusetts’ health care reforms and work to improve healthcare in the Commonwealth. The recently-released 2015 report, issued by the Health Policy Commission (HPC), includes thirteen such recommendations and commitments, which require action by health insurers, providers, employers, policymakers, and agencies.
Past reports have recognized that there are four areas of opportunity: fostering a value-based market; promoting an efficient, high-quality healthcare delivery system; advancing alternative payment methods (APMs); and enhancing transparency and data availability. This report built on those four areas in its analysis and recommendations.
Findings
The report found that Massachusetts’ healthcare spending grew by 4.8% in 2014. This amount exceeded the spending benchmark, but likely because of growth in MassHealth spending (driven in part by enrollment growth) and spending on prescription drugs across all market sectors. However, despite the high growth in prescription drug spending, total per capita spending growth was under the benchmark in all major market segments, including MassHealth.
The report also found that Massachusetts performed well “relative to the rest of the U.S. on most measures of quality and access to care and had the highest rate in the nation of insurance coverage in 2014.” However, when it came to measures of appropriate hospital admissions and excess readmissions, Massachusetts performed worse than the U.S. on average, and considerable opportunities exist to further improve quality and access, as well as population health.
Prescription Drug Spending
The report had a special section just for prescription drug spending, which is not surprising considering prescription drugs were a major area of growth in 2013, after years of low growth. In 2014, there was a 13% per capita spending increase in Massachusetts, which is slightly higher than the U.S. growth rate. The report believes that growth was driven by “the entry of new drugs, price increases, and a low rate of patent expirations.”
Hepatitis C drugs were also a main reason behind the drug spending growth; the report refers to those prescriptions as “new, effective, but high-cost.” The report also highlighted the fact that spending on specialty drugs, typically classified as drugs that cost more than $6,000 per year, grew from 26% to 34% of Massachusetts’ drug sales between 2010 and 2014.
Interestingly, the report noted that “given the current regulatory framework, many aspects of drug spending are outside the direct control of payers and providers in Massachusetts, and change would require federal action. However, levers for change are available at the state level, some requiring new legislation.”
Recommendations
Fostering a Value-Based Market
As documented in the report, the majority of care in Massachusetts is provided by a relatively small number of large provider systems. Such consolidation can have an impact on healthcare costs, quality, and access.
The recommendations made that relate to such issues include: payers and employers should continue to enhance strategies that enable consumers to make high-value choices, including increasing the transparency of comparative prices and quality; that the Commonwealth should enhance transparency of drug prices and spending, and that payers should consider different opportunities to maximize value; and that the Commonwealth should take action to implement safeguards for consumers and to improve the market function related to out-of-network billing.
Care Delivery
The HPC believes that investment, technical assistance, and certification programs can help to improve care delivery across the Commonwealth. The report also noted that “the increased adoption of effective APMs should further align provider incentives around quality and efficiency in care delivery.”
Several recommendations were made in this area, as well, including: the Commonwealth should continue to focus on enhancing community-based, integrated care and reducing the unnecessary utilization of costly acute settings; the Massachusetts Legislature should remove scope of practice restrictions for Advanced Practice Registered Nurses (APRNs), in an attempt to improve access to low-cost, high-quality care; and that Massachusetts should be a national leader in the use of enabling technologies to advance care delivery transformation through the expanded adoption of health information exchange, telehealth, and other new and future digital health innovations.
Alternative Payment Methods (APMs)
The Commonwealth has a goal of expanding the rate of adoption of effective APMs, and to do so, it is recommended that: payers and providers not only continue to focus on increasing the adoption of alternative payment methods (APMs), but also on increasing the effectiveness of APMs in promoting high quality, efficient care; the Commonwealth develop alternative payment models to catalyze delivery system reform in MassHealth; and payers and providers alike should work to align technical aspects of their global budget contracts, including quality measures, risk adjustment methods, and reports to providers.
Data and Measurement for Transparency and Accountability
The report finds that data are essential to all aspects of system transformation, and includes several recommendations for advancing the goal of greater transparency and data availability.
Those recommendations included: that Massachusetts should develop a coordinated quality strategy that is aligned across public agencies and market participants; and several recommendations related to the idea that CHIA should continue to improve and document its data resources and develop key spending measures.