Massachusetts is famously ahead of other states when it comes to health insurance coverage. Ninety-eight percent of Bay State residents have insurance.
But the state is also way ahead in another area: health care costs. The cost of care is the highest per capita in the country and, consequently, the world, according to Andrew Dreyfus, president and CEO of Blue Cross Blue Shield of Massachusetts.
Insurers, providers and government regulators have been working, with some success, to curb the rate of health care costs in Massachusetts.
Dreyfus, one of three panelists at a Health Journalism 2013 session called “Lessons from Massachusetts in handling health care costs,” explained how Blue Cross, the state’s biggest insurer, launched a new payment model a few years ago. The model, called the Alternative Quality Contract, is based on a global budget with shared risk. It includes incentives to improve the quality of care.
“Payment reform is the means,” Dreyfus said. “The end is better care.”
Blue Cross’s new payment method has not lowered overall spending, but it has controlled the rate of cost increases – below 2 percent annually, Dreyfus said.
Massachusetts became the first state in the nation to mandate health insurance in 2006. Six years later, state legislators passed a law aimed at controlling health care costs. The second law tackles the tougher problem, said David Seltz, executive director of the state’s Health Policy Commission.
“Addressing health care costs is really so much more challenging,” he said.
Seltz helped craft the cost control law and now heads a commission created by the legislation. The commission monitors whether the state is meeting the law’s goal: to make sure health care costs grow no more than the state economy.
He said he was optimistic about meeting that goal but added, “It will be a huge challenge. The complexity cannot be overstated.”
Tim Ferris, M.D., of Massachusetts General Hospital and Partners HealthCare, noted that the law comes with a slew of new regulations, including 25 boards, commissions and task forces.
Partners has changed its payment structure and now follows a long list of tactics to improve things like access to care and design of care.
Ferris gave the journalists in the room several points to think about as they pursue future stories, including the difficulty of creating fair benchmarks to analyze cost trends; the implications of having legislators and regulators in the exam room; and the confusion patients could feel over access issues.
The panelists were asked if patients would have to change the way they approach health care as part of the state effort to reduce costs.
“There’s a lot of wasteful spending in the health care system,” Dreyfus responded. “There’s a lot of opportunity to save money without limiting care.”
But Ferris said cost control efforts will eventually come down to the patient level. “At some point there will need to be incentives on patients to be more discriminating about their use of health care,” he said.