THE HEALTH POLICY COMMISSION’S annual cost trends hearing didn’t attract much media coverage this year, so I thought I’d summarize what I thought was most interesting.
The focus was on affordability and equity, and both Attorney General Andrea Campbell and Gov. Maura Healey gave presentations which highlighted their strong desire that equity and affordability issues tied to health status and health care in our state be given their due.
The thoughtfully constructed opening panel, which featured “community voices” who shared both personal life stories and described the common affordability and equity challenges confronting their respective communities, effectively grounded the day’s discussion in a way that made it hard to not think about how these issues play out at a personal and family level for many in our state.
The five other panels that filled the day’s agenda all touched upon issues of affordability and equity—with the constant refrain from panel participants that these two issues are truly intertwined. For example, Juan Lopera, Beth Israel Lahey Health’s chief diversity, equity, and inclusion officer, cited a study indicating the economic burden due to health inequities experienced by Black, Hispanic, and Asian populations in Massachusetts totals $5.9 billion, including about $1.5 billion in estimated avoidable health care spending.
Here are other panelists that caught my eye.
Michael Curry – The president and CEO of the Massachusetts League of Community Health Centers was asked by Deb Devaux, the chair of the Health Policy Commission, what he believes the commission can do to address health equity. While praising state government’s intended development of more detailed measures of equity and affordability, he urged the commission to hold an annual equity trends hearing to highlight the importance of these challenges and opportunities for action. Of course, top of mind for Curry is winning passage of the Health Equity Compact bill, which would prioritize equity in state government, require more standardized reporting of health equity data, and focus more resources in areas such as behavioral health, primary care, and support for multi-sector partnerships working on equity interventions in communities with historically poor health outcomes.
Sarah Iselin and Cain Hayes – The CEOs of Massachusetts Blue Cross Blue Shield and Point32Health warned the commissioners that the affordability challenge they are facing now is about to get a lot worse. They said health care providers are demanding double-digit annual price increases.
Both said the exceeding-the-benchmark worry that used to provide some check on rate increase requests is gone. Perhaps that’s because the consequences for exceeding the benchmark seem so minimal. Mass General Brigham’s total medical expenses exceeded the benchmark for years, and all it received was a performance improvement plan that ended up being little more than a slap on the wrist. My fear is the next time the Health Policy Commission comes after a provider for exceeding the benchmark, the response will be: “Sorry, we are happy to pay a $500,000 fine and forget about your performance improvement plan. We are after the millions of dollars of price increases that we think we need.”
A straightforward solution to check this behavior would be to strengthen the powers of the Health Policy Commission, giving the agency the authority to assess penalties for noncompliance with a performance improvement plan that are as high as the total sum of above-benchmark spending.
Another option, one I have written about, would require health care providers and insurers that exceed the spending growth cap to pay into a pool that can be used to help those households who experience affordability challenges. What can be fairer than that?
Kevin Tabb – The CEO of Beth Israel Lahey Health said his system’s proposed affiliation with Dana-Farber Cancer Institute – an affiliation that includes the construction of a new 300-bed hospital, up from 30 beds now — will reduce health care spending. To buttress his claim, he pointed to a chart produced by the Health Policy Commission indicating Dana-Farber is less pricey than either Brigham and Women’s or Beth Israel Deaconess hospitals on acuity-adjusted average commercial prices for inpatient stays in 2021.
Since the chart combines both facility and physician payments received for inpatient stays, I suspect Dana-Farber comes out less expensive because it on average requires fewer physician services per hospital admission. Even more relevant is that the average payment levels for certain types of cancer admissions are less than the those at hospitals like Brigham or Beth Israel Deaconess that will have a diverse array of patients admitted for different conditions. Really, a comparison that looks only at the kind of cancer admissions that Dana-Farber tends to admit across all hospitals would likely yield the best comparative information.
Still, the statistic cited by Tabb is worth looking harder at to see if he is correct or whether those who reference Dana-Farber’s high relative prices from the Center for Health Information and Analysis are more on target with their worries about the potential large increase in inpatient spending from a much larger Dana Farber inpatient facility.
Tabb also turned heads when he fended off a challenge from commissioner David Cutler. The Harvard professor suggested that, if the Lahey-Dana-Farber affiliation is approved, the new entity may take 200 or so cancer patients a day away from Brigham and Women’s. What happens, Cutler asked, if Brigham and Women’s backfills those beds with cancer or other patients that would likely be taken away from less costly community hospitals. Cutler said such a result would lead to overall greater health care spending, not less, as Tabb had suggested.
Tabb brought the hearing audience to a respectful moment of silence when he responded to Cutler’s question with a question of his own. Why, he asked, should Beth Israel Lahey or Dana-Farber be responsible for the fact that Brigham and Women’s is allowed, without any state interference to date, to essentially bully its way to its current absurd price levels that they obtain for commercially insured patients?
Clearly, this proposed new affiliation and hospital construction project will need careful state review. But one can already see that the content and nature of the arguments being made and data being put forward are likely to be in areas that are really not the expertise of Department of Public Health staff. My sense is that the Health Policy Commission will need to assist in all aspects of the financial review of both the affiliation and the addition of over 250 new cancer beds at Dana-Farber. Indeed, I would argue the Legislature should give the agency final review authority over these sorts of proposals.
Paul A. Hattis is a senior fellow at the Lown Institute.