State Says It's Reigning In Health Costs, But Consumers May Not Notice

Massachusetts is starting to get a handle on the growing cost of health care, but premium payers might not be seeing those savings.

A new report by a state research group shows that total spending on health care amounted to $61.1 billion in 2017. That's only 1.6 percent more than what was spent in 2016 and significantly under the state's goal of 3.6 percent growth.

The report from the Center for Health Information Analysis shows decreases in spending across nearly all sectors. However, two areas, hospital outpatient services and prescription medicine costs, are still growing at rates greater than the preferred benchmark.

Cost growth for private and employer-based insurance, which covers 40 percent of Massachusetts residents, is also below benchmark, at 3.1 percent. But those savings aren't reflected in the premiums and costs workers share with their employers, leaving employees' portion of costs growing at a rate above the benchmark.

Health Policy Commission Chairman Dr. Stuart Altman wrote in a statement about the report that there are "concerning trends related to the affordability of care and coverage."

"Out-of-pocket spending for consumers and premiums for small employers both rose faster than the benchmark, inflation, and wages, with 5.7% and 6.9% growth, respectively," Altman wrote.

Spending growth on publicly-assisted insurance, which makes up one quarter of the market, is also down. The state stabilized the spending trend that resulted from increased MassHealth enrollment after the Affordable Care Act was enacted. MassHealth costs are down .2 percent, compared to 4.3 percent growth in 2016 and 6.1 percent growth in 2015.

The report noted that the decrease in public dollars going toward healthcare was in part due to a decrease in MassHealth membership and an uptick in residents on plans paid by federal sources.

The low growth rate is the lowest recorded since the state ramped up efforts to analyze and control costs in 2012.

"Twelve years after leading the country in expanding health care access, Massachusetts is now leading the country again in lowering health care cost growth," Altman wrote.

The Health Policy Commission will hear from CHIA officials at their meeting Wednesday. The group, which is charged with keeping the state's health market in check, will use the CHIA report's data to consider policy solutions at their annual cost trends hearing Oct. 16 and 17.