In 2014, healthcare costs in the Commonwealth grew well beyond the price tag medical insurance pros and healthcare experts on Beacon Hill expected. Then last year, it happened again. Now, state leaders face a growing burden of medical costs for government workers and the poor, not to mention the impact on employers and workers—a burden that looks like it may only get worse.
Health-care spending in the state between 2014 and 2015 went up 4.1 percent, well beyond what state budget writers projected, an increase of 3.6 percent, according to the Center for Health Information and Analysis.
Navigating the web of culprits for who bears ultimate blame for the spikes in medical costs can be as tricky as figuring out our own coverage plan or medical bills. But one common villain came up over and over again at the Health Policy Commission's two-day hearing on the state's medical cost trends: Prescription drug expenses are too damn high.
The Pharma Hater Bandwagon was a popular one this week, but no one threw shade on the drug industry as strikingly as Harvard Pilgrim Health Care CEO Eric Schultz, who warned of "gougers out there that are behaving very poorly and hiding under the veil of a statement that they're saving lives so that they can increase prices as dramatically as these companies have."
The health insurance executive told policymakers that legal restrictions on predatory pharma prices need to be put in place. In fact, he implied that the gouging companies are just plundering their little robber baron hearts out until the government cracks down.
"If we don't, we're going to see these trends continue ... because they believe there's a short window of time left before such legislation comes forward," Schultz said.
Healthcare prices, like a lot of headaches local officials try to alleviate, just isn't something a state government can fully overcome on its own without a push from D.C. In and of itself, MassHealth, the biggest portion of state spending, is the Commonwealth-operated arm of the massive federal Medicaid program. Allowing Massachusetts greater flexibility to change it's health insurance system for poor residents is something Baker, like Gov. Deval Patrick before him, has been struggling with since getting into office.
Before the commission Monday, Baker said he's hoping to renegotiate the state's Medicaid waiver by the end of year, seven months before billions in federal aid runs out at the end of the fiscal year.
"Our goal for quite a while has been to put this to bed before the end of this year, thereby ensuring that there are no doubts about the Commonwealth's ability to continue to access the $1 billion in federal reimbursements that are currently scheduled to end at the end of this fiscal year," Baker told the HPC at their annual hearing on what's behind the state's massive health care tab.
Next August marks the expiration of the a three-year deal with the feds hammered out by Patrick's administration in 2014. The "five-year" waiver marks the calendar the way fiscal years are sometimes accounted for in Washington: The five-year deal was only funded for three years, meaning Baker has to make a deal with the outgoing Obama administration or risk the loss of billions in federal funds.
Baker wants MassHealth to take a more active role in the behavioral health of its enrollees. Focusing on substance abuse intervention and mental health services, says Baker, "raises the distinct possibility of coming up with a much more comprehensive way of serving the folks around MassHealth." And hopefully, for the budget's sake, all that preventative and behavioral care will lead to fewer expensive emergency room visits for those on MassHealth and more cost savings down the road.
On day two, the pharmaceutical industry came for their tongue-lashing, with Dr. Don Berwick, a 2014 contender for the Democratic nomination for governor, challenging the ethics of the industry.
An industry representative said it's federal regulations slowing the approval of new and generic drugs that leads to situations where a common medication like an Epipen can skyrocket in cost with no warning or consequences. The industry pitch: State regulators like the HPC can help facilitate cheaper drugs coming into the market by lessening the industry's regulatory burden.
"You can help us communicate with federal regulators about the need to clear the backlog of generic drug applications," said Lisa Joldersma, vice president of policy and research for Pharmaceutical Research and Manufacturers of America, a Big Pharma's trade group.
Alongside Baker's administration, the two branches of the Legislature constitute the other two legs of the Beacon Hill policy stool. Like usual, the House and Senate may not be on the same page when it comes to a legislative fix for the ballooning costs or spiraling budget woes.
Senate President Stan Rosenberg testified that he's going to assemble a team from his chamber to travel to other states to investigate how best to tackle the problem.
The House's representative at the hearing, Health Care Finance Chairman Jeffrey Sanchez, cautioned that the state needs to do more to think about the social impact of poorly delivered and expensive healthcare, especially for those on MassHealth. Sanchez used the example of a poor patient with chronic diseases and very few options for help.
"Since it may take weeks to get an appointment with a primary care provider or specialist, and when he does, he knows he may be subject to the language line or a translator that doesn’t have a clue about where he comes from, where he lives, and isn’t able to gain his trust or faith within a 10-minute harried appointment," Sanchez testified.
All the learned analysis done by the dozens of groups that have a hand in state health cost policy "means nothing if we can’t figure out, in this Commonwealth of plenty, how we can help the most vulnerable among us to care for themselves, because they want to," Sanchez said. The Jamaica Plain Democrat said that while 97 percent of Massachusetts residents with health insurance, only 82 percent of hispanics are insured, versus 92 percent for white and African-American resident, laying out the racial disparity in the Commonwealth's cherished healthcare system before the nearly all-white HPC panel.
The HPC will issue a final report on where medical costs have grown in March.
Material from the State House News Service was used in this report.
