f

Health Policy Commission | 0

What is the role of the Health Policy Commission?

Chapter 224 sets the ambitious goal of bringing health care spending growth in line with growth in the states o erall economy! "he Commission is wor#ing to ad ance this goal by$

%ostering reforms to the health care payment system that aim to reward &uality care' impro e
health outcomes' and more efficiently spend health care dollars

Promoting inno ati e deli ery models that will enhance care coordination' ad ance integration
of beha ioral and physical health ser ices' and encourage effecti e patient(centered care

)n esting in community hospitals and other pro iders to support the transition to new payment
methods and care deli ery models

)ncreasing the transparency of pro ider organi*ations and assessing the impact of health care
mar#et changes on the cost' &uality' and access of health care ser ices in +assachusetts

,naly*ing and reporting of cost trend through data e-amination and an annual public hearing
process to pro ide accountability of the health care cost(containment goals set forth by Chapter 224

. aluating the pre alence and performance of initiati es aimed at health system transformation .ngaging consumers and businesses on health care cost and &uality initiati es Partnering with a wide range of sta#eholders to promote informed dialogue' recommend
e idence(based policies' and identify collaborati e solutions

Health Policy Commission | 1

/oals for our annual report

"he Commission releases an annual cost trends report' intended to pro ide$

, profile of the +assachusetts health care deli ery system ,n e idence(based discussion of trends in +assachusetts health care costs' le eraging new
data sets such as the ,ll(Payer Claims 0atabase

,nalysis of dri ers of growth' including factors leading the states growth to be abo e or
below the benchmar# set by Chapter 224

, fact base to inform the other acti ities of the Commission' as well as the broader policy
discussion in +assachusetts

0eep di es into specific cost dri ers in +assachusetts' including$ "opics of #nown importance that can be addressed with new or state(specific data "opics that ha e been insufficiently studied or e aluated "opics where a comprehensi e discussion integrating e idence from multiple sources
can better inform policy dialogue This years annual report does not measure cost growth against the benchmark established in Chapter 224. The benchmark will be reviewed beginning in 2014.

Health Policy Commission | 2

"opics in the 2011 cost trends report

Profile of +assachusetts

3e els of spending

"rends in spending

"he +, deli ery system

2uality and access

2011 cost trends report

0eep( 0eep(di es

Hospital operating e-penses

Wasteful spending

High(cost patients

Health Policy Commission | 1

"opics in the 2011 cost trends report

Profile of +assachusetts

3e els of spending

"rends in spending

"he +, deli ery system

2uality and access

2011 cost trends report

0eep( 0eep(di es

Hospital operating e-penses

Wasteful spending

High(cost patients

Health Policy Commission | 4

Health care spending as a proportion of the +assachusetts economy rose o er the last decade' but declined from 2005(2012
Personal health care e-penditures6 relati e to si*e of economy
Percent of respecti e economy9

20B 15B 1AB 1CB 1@B 14B 14B 11B 12B 11B 10B 1550 1552 1554 155@ 155A 2000 2002

+, 7C+; =H.8

+, 7estimated8<

:!;!

1@!AB

1@!@B

14!2B 12!5B
11!4B

14!1B

12!AB 12!1B

2004

200@

200A

2010

2012

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! 9 +easured as gross domestic product 7/0P8 for the :!;! and gross state product 7/;P8 for +assachusetts < C+; state(le el personal health care e-penditure data ha e only been published through 2005! 2010(2012 +, figures were estimated based on 2005(2012 e-penditure data pro ided by C+; for +edicare' ,=% budget information statements and e-penditure data from +assHealth' and CH), "+. reports for commercial payers! ;ource$ ;ource$ Centers for +edicare and +edicaid ;er ices> ?ureau of .conomic ,nalysis> Center for Health )nformation and ,nalysis> +assHealth> Census ?ureau> HPC analysis

Health Policy Commission | 4

2 4

Profile of +assachusetts health care spending

1
20B 15B 1AB 1CB 1@B 14B 14B 11B 12B 11B 10B 1550 1552 1554 155@ 155A 2000 2002 2004 200@ 200A 2010 2012

3e els of spending$ what e-plains the difference in +assachusetts spending relati e to the :!;! a erage?

"rends in spending$ spending$ what contributed to the growth in +assachusetts health care spending o er the past two decades?

1@!AB

1@!@B

14!2B 12!5B
11!4B

14!1B

12!AB 12!1B

"he +assachusetts deli ery system$ system$ how do characteristics of the states deli ery system contribute to spending le els and trends?

2uality and access$ access$ how does +assachusetts perform compared to the :!;! on measures of &uality and access?
Health Policy Commission | @

2 4

Profile of +assachusetts health care spending

1
20B 15B 1AB 1CB 1@B 14B 14B 11B 12B 11B 10B 1550 1552 1554 155@ 155A 2000 2002 2004 200@ 200A 2010 2012

3e els of spending$ what e-plains the difference in +assachusetts spending relati e to the :!;! a erage?

1@!AB

1@!@B

14!2B 12!5B
11!4B

14!1B

12!AB 12!1B

Health Policy Commission | C

2 4

Per capita health care spending in +assachusetts is the highest of any state
Per capita personal health care e-penditures6
Per capita dollars' 2005

D5'2CA DA'141 DC'C10 D@'A14 DC'0C@ D@'C4@ D@'21A D4'524

"otaled 14!2 percent of the :!;! economy in 2005 "otaled 1@!A percent of the +assachusetts economy in 2005

:!;!

+,

=E

P,

FH

)3

C,

"G

;tate ran#

10

1A

2A

42

44

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! ;ource$ ;ource$ Centers for +edicare and +edicaid ;er ices> ?ureau of .conomic ,nalysis> HPC analysis

Health Policy Commission | A

2 4

;pending differs significantly between +assachusetts and the :!;!' e en after adHusting for certain factors
0ifference in per capita personal health care e-penditures between +assachusetts and the :!;!6
Percent of :!;! per capita personal health care spending' 2005 dollars

%actor

+, compared to :!;!

.ffect on spending

1@B

.stimated contribution of certain factors

,ge

Flder

)ncrease

20B

Iemaining difference in spending between +, and :!;!

Co erage and access

?roader insurance co erage

)ncrease

)nput costs9

Higher input costs

)ncrease

0ifference in per capita spending between +, and :!;!

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! 9 ?ased on the +edicare /eographic ,dHustment %actor 7/,%8' which adHusts for wages' office rents' supplies' and medical malpractice insurance premiums! ;ource$ ;ource$ Centers for +edicare and +edicaid ;er ices> +edical .-penditure Panel ;ur ey> Census ?ureau> ;mith ;' =ewhouse JP' %reeland +;! Health !!airs! 2005> Hadley J' Holahan J! Health !!airs! 2001> HPC analysis

Health Policy Commission | 5

2 4

F erall$ +assachusetts spends more than the :!;! a erage across all categories' but especially in hospital care and long(term care
Per capita personal health care e-penditures6
0ollars' 2005 "otal e-penditures per capita difference +assachusetts e-penditures relati e to :!;!

KD1'010 KDCC1

D5'2CA D@'A14

KD4A0

KDCC

KD4

+, :!;!
Hospital care 3ong(term care and home health9 Professional ser ices< 0rugs and other +edical durables medical non( durables

Personal health care e-penditures6

Percent of total difference

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! 9 )ncludes nursing home care' home health care' and other health' residential' and professional care < )ncludes physician and clinical ser ices' dental ser ices' and other professional ser ices ;ource$ Centers for +edicare and +edicaid ;er ices> HPC analysis

Health Policy Commission | 10

2 4

+edicare$ +edicare all +assachusetts spending abo e the :!;! a erage is in hospital care and long(term care
Per beneficiary personal health care e-penditures6
0ollars' 2005 +edicare e-penditures per beneficiary difference +assachusetts +edicare e-penditures relati e to :!;!

KDA20 KD4A1

D11'2CC D10'1@4

(D21 (D115

(D45

:!;!

+,

Hospital care

3ong(term care and home health9

Professional ser ices<

0rugs and other +edical durables medical non( durables

Personal health care e-penditures6

Percent of total difference

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! 9 )ncludes nursing home care' home health care' and other health' residential' and professional care < )ncludes physician and clinical ser ices' dental ser ices' and other professional ser ices ;ource$ Centers for +edicare and +edicaid ;er ices> HPC analysis

Health Policy Commission | 11

2 4

+edicare$ for +edicare beneficiaries' the difference in spending is dri en mostly by price adHustments for teaching and wages
+assachusetts +edicare per beneficiary spending relati e to :!;! a erage
Percent difference' 2005

0ifference attributable to utili*ation6 0ifference in per beneficiary e-penditures 0ifference attributable to prices

6 .stimated as the difference in spending that would remain if prices were set at national a erage le els ;ource$ Centers for +edicare L +edicaid ;er ices

Health Policy Commission | 12

2 4

+edicaid$ +edicaid the maHority of +assHealth spending abo e the :!;! a erage is in long(term care
Per beneficiary personal health care e-penditures6
0ollars' 2005 +edicaid e-penditures per beneficiary difference +assachusetts +edicaid e-penditures relati e to :!;!

KD1'0@2

DA'2CA D@'A2@

KD44@

DC4 (D14@

D24

:!;!

+,

Hospital care

3ong(term care and home health9

Professional ser ices<

0rugs and other +edical durables medical non( durables

Personal health care e-penditures6

Percent of total difference

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! 9 )ncludes nursing home care' home health care' and other health' residential' and professional care < )ncludes physician and clinical ser ices' dental ser ices' and other professional ser ices ;ource$ Centers for +edicare and +edicaid ;er ices> HPC analysis

Health Policy Commission | 11

2 4

+edicaid$ differences in spending are dri en by breadth of benefits' reimbursement le els' and enrollment
.-penditures per +edicaid enrollee6
0ollars' 2005 DA'2CA D@'A2@ 1@!4B

Iesidents enrolled in +edicaid

Percent of population' 2005 20!1B

:!;!

+,

higher :!;!

+,

higher

"actors e#plaining di!!erence include$ Health status of enrollees ?readth of benefits Higher +assHealth reimbursement rates relati e to national +edicaid a erage 7e!g!' 10B higher on physician ser ices98

"actors e#plaining di!!erence include$ 0ifferences in demographics and income ?roader categories of eligibility

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! 9 %igure is based on 200A data for +edicaid fee(for(ser ice 7%%;8 programs> "ennessee e-cluded from analysis since the state does not ha e a +edicaid %%; program! Comparable figure for 2012 is 21B! ;ource$ ;ource$ Centers for +edicare and +edicaid ;er ices> Maiser %amily %oundation> "he :rban )nstitute> HPC analysis

Health Policy Commission | 14

2 4

F erall$ hospital utili*ation is higher in +assachusetts than the :!;! a erage' especially for outpatient ser ices
+easures of hospital ser ice utili*ation
Per 1'000 population' 2011 e-cept where noted

+, Hospital inpatient )npatient admissions 7inde-ed to :!;!' age(adHusted8 )npatient a erage length(of(stay )npatient days )npatient surgeries6 Hospital outpatient9 .mergency department 7.08 isits Futpatient isits' e-cluding .0 Futpatient surgeries6 4@A 2'50C C1 1!10 4!0 @11 12

:!;!

0ifference 7B8

1!00 4!4 @00 12

10B (CB 4B 0B

414 1'@51 4@

11B C2B 2CB

6 %igures for inpatient and outpatient surgeries are from 2010 9 Futpatient hospital isits include all clinic isits' referred isits' obser ation ser ices' outpatient surgeries' and emergency department isits ;ource$ ;ource$ Maiser %amily %oundation> ,merican Hospital ,ssociation> +edical .-penditure Panel ;ur ey> HPC analysis

Health Policy Commission | 14

2 4

F erall$ in addition to higher utili*ation' +assachusetts has higher prices than the :!;! a erage across all payer types
+assachusetts prices relati e to :!;! a erage
Price inde-' 200C(05

.stimate of price relati e to :!;!

, ailable e idence ,nalysis by C+; using standardi*ed prices +ethod includes the effect of both unit prices and pro ider mi0ata for 2005 ,nalysis by M%% based on sur ey of state reimbursement le els for physician ser ices +ethod only includes the effect of unit prices 0ata for 200A ,nalysis by researchers on national commercial data from large' multi(state employers +ethod includes the effect of both unit prices and pro ider mi0ata for 200C(2005 /enerally' price differences may include two factors$ :nit prices$ prices the fee schedules established between payers and pro iders Pro ider mi-$ mi- whether consumers choose to recei e their care in higher(price or lower( price settings

+edicare

,bo e :!;! a erage

+assHealth

,bo e :!;! a erage

Commercial

,bo e :!;! a erage

;ource$

Centers for +edicare and +edicaid ;er ices> Maiser %amily %oundation> "he :rban )nstitute> ,nalysis by Chapin White of a report from the 1554(2005 "ru en Health ,nalytics +ar#et;canN Commercial Claims and .ncounters 0atabase 7copyright O 2011 "ru en Health ,nalytics' all rights reser ed8> Har ard :ni ersity research conducted for )nstitute of +edicine> HPC analysis

Health Policy Commission | 1@

2 4

?oth utili*ation differences and price differences factor into +assachusetts spending abo e the :!;! a erage
3e els of spending 1@B higher than national a erage Per Per capita spending Higher utili*ation for state as a whole$ - )npatient 7age(adHusted8$ 10B higher - Hospital outpatient$ C2B higher :tili*ation F erall +edicare utili*ation comparable to national a erage' although differences may e-ist for particular categories of ser ice =ational claims data sets suggest commercial prices are higher than national a erages +edicare prices are A percent higher' higher dri en by wage and teaching adHustments +edicaid unit prices for physician ser ices are 10 percent higher than national a erages

Price

;ource$

Centers for +edicare and +edicaid ;er ices> ,merican Hospital ,ssociation> Maiser %amily %oundation> "he :rban )nstitute> ,nalysis by Chapin White of a report from the 1554(2005 "ru en Health ,nalytics +ar#et;canN Commercial Claims and .ncounters 0atabase 7copyright O 2011 "ru en Health ,nalytics' all rights reser ed8> Har ard :ni ersity research conducted for )nstitute of +edicine> HPC analysis

Health Policy Commission | 1C

2 4

Profile of +assachusetts health care spending

2
20B 15B 1AB 1CB 1@B 14B 14B 11B 12B 11B 10B 1550 1552 1554 155@ 155A 2000 2002 2004 200@ 200A 2010 2012

"rends in spending$ spending$ what contributed to the growth in +assachusetts health care spending o er the past two decades?

1@!AB

1@!@B

14!2B 12!5B
11!4B

14!1B

12!AB 12!1B

Health Policy Commission | 1A

2 4

;lower health care growth in the 1550s was followed by faster growth in the 2000s
/rowth in personal health care e-penditures6 relati e to economic growth
Percentage points of health care e-penditure growth minus /0PP/;P growth9 +, 7C+; =H.8 +, 7estimated8< :!;!

A pp @ pp 4 pp 2 pp 0 pp (2 pp (4 pp (@ pp

Health care spending grew faster than the economy

Health care spending grew slower than the economy 51( 52 51( 54 54( 5@ 5C( 5A 55( 00 01( 02 01( 04 04( 0@ 0C( 0A 05( 10 11( 12

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! 9 +easured as gross domestic product 7/0P8 for the :!;! and gross state product 7/;P8 for +assachusetts < C+; state(le el personal health care e-penditure data ha e only been published through 2005! 2010(2012 +, figures were estimated based on 2005(2012 e-penditure data pro ided by C+; for +edicare' ,=% budget information statements and e-penditure data from +assHealth' and CH), "+. reports for commercial payers! ;ource$ Centers for +edicare and +edicaid ;er ices> ?ureau of .conomic ,nalysis> Center for Health )nformation and ,nalysis> +assHealth> Census ?ureau> HPC analysis

Health Policy Commission | 15

2 4

"he :!;! has not e-perienced sustained periods of slow health care spending growth
:!;! growth in personal health care e-penditures in e-cess of economic growth6
Percentage points of health care e-penditure growth minus /0P growth

=i-on .-ecuti e Frder free*ing prices and wages

Health care industry oluntary effort on cost containment

)ntroduction of +edicare 0I/ payment system

Iise of managed care plans

5 pp A pp C pp @ pp 4 pp 4 pp 1 pp 2 pp 1 pp 0 pp 15@0 (1 pp (2 pp 15@4 15C0 15C4 15A0 15A4 1550 1554 2000 2004 2010

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! ;ource$ ;ource$ Centers for +edicare and +edicaid ;er ices> ?ureau of .conomic ,nalysis> HPC analysis

Health Policy Commission | 20

2 4

%rom 2001 to 2005' the difference between +assachusetts and the :!;! grew
0ifference between +assachusetts and :!;! per capita personal health care e-penditures6
Percent difference from national a erage

percentage point growth in gap between +, and :!;! 701( 701(058 difference in 2005 difference in 2001
+, per capita PHC

D10'000 DA'000 D@'000 D4'000 D2'000 D0 1551

:!;! per capita PHC

1551

1554

155C

1555

2001

2001

2004

200C

2005

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! ;ource$ Centers for +edicare and +edicaid ;er ices> ?ureau of .conomic ,nalysis> Center for Health )nformation and ,nalysis> +assHealth> Census ?ureau> HPC analysis

Health Policy Commission | 21

2 4

Commercial prices were the primary dri er of the increased difference from the :!;! a erage
3e els of spending 1@B higher than national a erage Per Per capita spending Higher utili*ation for state as a whole$ - )npatient 7age(adHusted8$ 10B higher - Hospital outpatient$ C2B higher :tili*ation F erall +edicare utili*ation comparable to national a erage' although differences may e-ist for particular categories of ser ice =ational claims data sets suggest commercial prices are higher than national a erages +edicare prices are A percent higher' dri en by wage and teaching adHustments +edicaid unit prices for physician ser ices are 10 percent higher than national a erages Commercial hospital inpatient prices grew 10 percentage points relati e to national a erage "rend from 2001 to 2005 0ifference between +assachusetts and the national a erage grew by 10 percentage points

Hospital utili*ation grew at appro-imately the same rate as national a erage

Price

;ource$

Centers for +edicare and +edicaid ;er ices> ,merican Hospital ,ssociation> Maiser %amily %oundation> "he :rban )nstitute> ,nalysis by Chapin White of a report from the 1554(2005 "ru en Health ,nalytics +ar#et;canN Commercial Claims and .ncounters 0atabase 7copyright O 2011 "ru en Health ,nalytics' all rights reser ed8> Har ard :ni ersity research conducted for )nstitute of +edicine> HPC analysis

Health Policy Commission | 22

2 4

%rom 2005 to 2012' growth rates slowed in line with the :!;!
/rowth in personal health care e-penditures relati e to growth in economy6
Per capita compound annual growth rate

Personal health care e-penditure growth /;PP/0P growth 2001 ( 2005 2005 ( 2012 7estimated8 9

@!4B 4!4B

1!CB

2!AB

2!5B

1!1B

1!2B

1!1B

:!;!

+,

:!;!

+,

6 Personal health care e-penditures 7PHC8 are a subset of national health e-penditures! PHC e-cludes administration and the net cost of pri ate insurance' public health acti ity' and in estment in research' structures and e&uipment! 9 C+; state(le el personal health care e-penditure data ha e only been published through 2005! 2010(2012 +, figures were estimated based on 2005(2012 e-penditure data pro ided by C+; for +edicare' ,=% budget information statements and e-penditure data from +assHealth' and CH), "+. reports for commercial payers! ;ource$ Centers for +edicare and +edicaid ;er ices> ?ureau of .conomic ,nalysis> Center for Health )nformation and ,nalysis> +assHealth> Census ?ureau> HPC analysis

Health Policy Commission | 21

2 4

Fur focus is on statewide' per capita growth

What is the benchmar# measured against?

.stimates of per capita P per member medical trend6 in 2005( 2005(12 ;tatewide +edicare +assHealth
%igure is higher than for any indi idual payer

,ggregate statewide health care e-penditures Population of +assachusetts

?enchmar# is measured against statewide' per capita health care growth

Commercial

6 +edical trend is one component of total health care e-penditures' but does not capture the entire measure! "he measure that will be compared to the Chapter 224 benchmar# also includes the net cost of pri ate health insurance! ;ource$ Centers for +edicare and +edicaid ;er ices> ?ureau of .conomic ,nalysis> Center for Health )nformation and ,nalysis> +assHealth> Census ?ureau> HPC analysis

Health Policy Commission | 24

2 4

,ccounting for shifts in payer mi- is important when trac#ing statewide growth
)llustrati e e-ample
Per member per year spending

Payer 1 Payer 1

Payer 2 Payer 2 D12 , g$ D10 D10

;tatewide ;tatewide

D12 D10 DA
, g$ DC

Eear11 Eear

DA
D@ D4 D2

D@
, g$ D4

D4 D2

Fne member changes plans

D12 D10 D10 DA

, g$ DC

D12

, g$ D5 Eear 2 2 Eear

DA D@ D@ D4 D2

D4 , g$ D1 D2

Payer 1 growth of (24B

Payer 2 growth of (10B

;tatewide growth of 0B
Health Policy Commission | 24

2 4

.nrollment shifts from 2005(2012 affected total +assachusetts e-penditure growth

+assachusetts health care cost trends' 2005 ( 2012
Compound annual growth rate

Payer

.nrollment 2!CB 4!CB (1!0B 0!2B

Per person e-penditures 1!4B 0!AB 2!AB 1!1B 1!2B

.stimated6 growth

+edicare +assHealth Commercial +assachusetts Q total population

)llustrati e e-ample$
statewide growth at hypothetical payer growth rates with same enrollment shifts

Payer +edicare +assHealth Commercial +assachusetts Q total population

.nrollment 2!CB 4!CB (1!0B 0!2B

Per person e-penditures 1!@B 1!@B 1!@B 4!0B 4!0B

6 C+; state(le el personal health care e-penditure data ha e only been published through 2005! 2010(2012 +, figures were estimated based on 2005(2012 e-penditure data pro ided by C+; for +edicare' ,=% budget information statements and e-penditure data from +assHealth' and CH), "+. reports for commercial payers! ;ource$ Centers for +edicare and +edicaid ;er ices> ?ureau of .conomic ,nalysis> Center for Health )nformation and ,nalysis> +assHealth> Census ?ureau> HPC analysis

Health Policy Commission | 2@

2 4

Price has dri en recent commercial e-penditure growth' while utili*ation has dri en +edicare e-penditure growth
0econstruction of e-penditure growth in the commercial and +edicare mar#ets
/rowth of dri er relati e to o erall growth' 2005(2011

0ri er Iis#

0escription Changes in a erage health status across all members

Commercial change 2005( 2005(2011

3imited change

+edicare change 2005( 2005(2011

3imited change

0ri ers of e-penditure growth

:tili*ation

Changes in the &uantity of ser ices used' adHusted for changes in a erage health status Changes in unit prices$ the fee schedules established between payers and pro iders Changes in pro ider mi-$ whether consumers choose to recei e their care in higher(price or lower(price settings

)ncrease 3imited change

)ncrease 3imited change6

Price

6 +edicare fee(for(ser ice unit prices are set according to a fee schedule established by the Centers for +edicare L +edicaid ;er ices 7C+;8' which is adHusted to reflect input cost differences due to geography and teaching status! Cost growth attributable to price may occur if C+; updates fee schedules or if +edicare beneficiaries choose to recei e care in settings with higher input costs! ;ource$ ;ource$ ,ll(Payer Claims 0atabase> HPC analysis

Health Policy Commission | 2C

2 4

Profile of +assachusetts health care spending

20B 15B 1AB 1CB 1@B 14B 14B 11B 12B 11B 10B 1550 1552 1554 155@ 155A 2000 2002 2004 200@ 200A 2010 2012

1@!AB

1@!@B

14!2B 12!5B
11!4B

14!1B

12!AB 12!1B

"he +assachusetts deli ery system$ system$ how do characteristics of the states deli ery system contribute to spending le els and trends?
Health Policy Commission | 2A

2 4

"he +assachusetts deli ery system uses maHor teaching hospitals for far more of its inpatient care than the national a erage

,ll(payer discharges in systems with maHor teaching hospitals 6

Percent of total statewide discharges

Fther hospitals not in systems with maHor teaching hospitals of +edicare discharges in +assachusetts are in maHor teaching hospitals6 Fther hospitals in systems with maHor teaching hospitals +aHor teaching hospitals

100

100

40 1C
41

12 21

of +edicare discharges nationwide are in maHor teaching hospitals6

4C
Percent of discharges in maHor teaching hospitals across all payers

2002

20129

6 +aHor teaching hospitals are defined as those with at least 24 residents per 100 beds! 9 ?ased on systems in 2012! 0oes not include impact of se eral transactions 7Cooley 0ic#inson Hospital' Jordan Hospital8 completed in 2011! ;ource$ Center for Health )nformation and ,nalysis> +edicare Payment ,d isory Commission> HPC analysis

Health Policy Commission | 25

2 4

Profile of +assachusetts health care spending

20B 15B 1AB 1CB 1@B 14B 14B 11B 12B 11B 10B 1550 1552 1554 155@ 155A 2000 2002 2004 200@ 200A 2010 2012

1@!AB

1@!@B

14!2B 12!5B
11!4B

14!1B

12!AB 12!1B

2uality and access$ access$ how does +assachusetts perform compared to the :!;! on measures of &uality and access?
Health Policy Commission | 10

2 4

"he +assachusetts population has relati ely low chronic disease pre alence' although asthma rates are high
Pre alence of common chronic diseases
Percent of population

Healthiest &uartile of states 2nd &uartile of states

1rd &uartile of states 3east healthy &uartile of states

+,
0iabetes ,ngina P coronary heart disease Cancer 0epression ,sthma A!0B 1!AB 12!0B 1@!CB 14!4B

:!;!
5!4B 4!1B 12!4B 1C!4B 11!@B

+, 2uartile

=ote$ +easures abo e were collected through the ?eha ioral Iis# %actor ;ur eillance ;ystem and are defined as follows$ 0iabetes$ Iesponded REesS to R7. er told8 you ha e diabetes? S ,ngina P coronary heart disease$ Iesponded REesS to R7. er told8 you had angina or coronary heart disease?S Cancer$ Iesponded REesS to R7. er told8 you had s#in cancer?S or to R7. er told8 you had any other types of cancer? R 0epression$ Iesponded REesS to R7. er told8 you ha e a depressi e disorder' including depression' maHor depression' dysthymia' or minor depression?S ,sthma$ Iesponded REesS to R7. er told8 you had asthma?S ;ource$ Centers for 0isease Control and Pre ention> HPC analysis

Health Policy Commission | 11

2 4

0isease pre alence aries greatly by region within the state

0iabetes pre alence by region
Payer(specific pre alence rate

+.0)C,I.
F er 2@!CB pre alence ?etween 21!CB and 2@!CB pre alence ?elow 21!CB pre alence F er 4!CB pre alence

CF++.IC),3
?elow 1!CB pre alence

?etween 1!CB and 4!CB pre alence

;tatewide pre alence of diabetes within +edicare

;tatewide pre alence of diabetes within commercial

;ource$

,ll(Payer Claims 0atabase> HPC analysis

Health Policy Commission | 12

2 4

+assachusetts outperforms national a erages on many &uality measures' but often falls short of a 50th percentile benchmar#
Condition and procedure &uality measures
:nits ary by measure
Pre ention and population health Childhood immuni*ation status 3ow birth weight rate Iate of older adults recei ing flu shots Iate of female adolescents recei ing HPT accine Chronic care Iate of cholesterol management for patients with cardio ascular conditions Iate of controlling high blood pressure Iate of diabetes short(term complications admissions 7adult8 =umber of admissions for CH% =umber of adults admitted for asthma6 =umber of CFP0 admissions Patient safety Iate of iatrogenic pneumothora- 7ris#(adHusted8 Iate of postoperati e respiratory failure Iate of central enous catheter(related blood stream infections 0!42 per 1'000 A!1 per 1'000 0!15 per 1'000 0!41 per 1'000 @!@ per 1'000 0!2A per 1'000 =P, =P, =P, A5B @1B 4A per 100'000 11A per 100'000 114 per 100'000 155 per 100'000 52B C1B 4A per 100'000 1C4 per 100'000 140 per 100'000 24C per 100'000 @1B A!1B C0B 24B C@B C!CB C1B 41B
?etter than 50th percentile ?etween a erage and 50th percentile ?elow a erage

:!;!

+,

Ielati e performance

6 ,dmissions for asthma per 100'000 population' age 1A and o er> =2% measure counts all discharges of age greater than 1A and less than 40 years old ;ource$ +assachusetts Health 2uality Partners> Maiser %amily %oundation> ,gency for Healthcare Iesearch and 2uality> +assachusetts )mmuni*ation ,ction Partnership> Centers for 0isease Control and Pre ention> Center for Health )nformation and ,nalysis> HPC analysis

Health Policy Commission | 11

2 4

Conclusion for profile of +assachusetts health care spending

;pending in +assachusetts is the highest of any state in the :!;!' crowding out other
priorities for consumers' businesses' and go ernment F er the past decade' +assachusetts health care spending has grown much faster than the national a erage' dri en primarily by faster growth in commercial prices +assachusetts residents continue to use health care ser ices at a higher rate than the nation' especially in hospital care and long(term care' although the difference between +assachusetts and the :!;! a erage has been stable o er the past decade

While spending growth in +assachusetts since 2005 has slowed in line with slower
national growth' sustaining lower growth rates will re&uire effort Past periods of slow health care growth in +assachusetts' such as the 1550s' ha e been followed by sustained periods of higher growth While obser ed growth rates for indi idual payers are low' the statewide growth rate is higher' dri en by enrollment shifts between payers due to trends such as the aging of the population

Health Policy Commission | 14

"opics in the 2011 cost trends report

Profile of +assachusetts

3e els of spending

"rends in spending

"he +, deli ery system

2uality and access

2011 cost trends report

0eep( 0eep(di es

Hospital operating e-penses

Wasteful spending

High(cost patients

Health Policy Commission | 14

)n the commercial and +edicare mar#ets' persistence within the high( cost patients is 25 percent
,naly*ing persistence of high(cost 7top 4B by e-penditures8 patient status6
Percent of medical e-penditures 7e-cludes drug spending8 in 2010 and 2011

CF++.IC),3 Commercial

Ff patients who were top 4B in cost in 2010U

of patients remained top 4B in cost in 2011

+.0)C,I. +edicare

Ff patients who were top 4B in cost in 2010U

of patients remained top 4B in cost in 2011

6 "he sample for analysis was limited to patients who had continuous enrollment from 1P1P2010 Q 12P11P2011 and costs of at least D1 in each year! %igures do not capture pharmacy costs' payments outside the claims system' +edicare cost(sharing' or end(of(life care for patients who died in 2010 or 2011! ;ource$ ,ll(Payer Claims 0atabase> HPC analysis

Health Policy Commission | 1@

Patients with beha ioral health and chronic conditions ha e significantly higher medical e-penditures
+edical e-penditures per patient 7e-cludes drug spending86
Ielati e to a erage patient with no beha ioral health or chronic comorbidity in 2010 , erage patient with neither comorbidity ?eha ioral health9 comorbidity Chronic condition comorbidity ?oth comorbidities

6 "he sample for analysis was limited to patients who had continuous enrollment from 1P1P2010 Q 12P11P2011 and costs of at least D1 in each year! %igures do not capture pharmacy costs' payments outside the claims system' +edicare cost(sharing' or end(of(life care for patients who died in 2010 or 2011! 9 ?eha ioral health comorbidity includes child psychology' se ere and persistent mental illness' mental health' psychiatry' and substance abuse < Chronic condition includes arthritis' epilepsy' glaucoma' hemophilia' sic#le(cell anemia' heart disease' H)TP,)0;' hyperlipidemia' hypertension' multiple sclerosis' renal' asthma' and diabetes ;ource$ ,ll(Payer Claims 0atabase> HPC analysis

+.0)C,I. +edicare

CF++.IC),3 Commercial

Health Policy Commission | 1C