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Bigbypic2 By Dr. JudyAnn Bigby

Yesterday the state Division of Health Care Finance and Policy (DHCFP) released its annual health care premium trend and price variation reports, in advance of health care cost trend hearings the Division will hold one month from now. As we have witnessed in recent years, premiums continue to rise. However, not only are Massachusetts residents required to pay more out of pocket in co-pays and deductibles, benefits are also decreasing.  The greatest hazard of this trend in the increase in out-of-pocket spending is that consumers will reach a threshold where they will elect to avoid health care, including preventive care.   From 2007 through 2009, premiums rose between 5 and 10 percent, with small group employers paying more for premiums than mid-sized and large group employers.

A companion report from the Division on price variation shows a wide variation across providers in Massachusetts for the same service.  Prices paid for the same hospital inpatient services and for physician and professional services vary significantly statewide for every service examined.  There was at least a three-fold difference for every service and for most, a variation of six or seven- fold.  The highest ‘severity-adjusted prices,’ or prices adjusted according to how sick patients are, were often received by hospitals is the Boston metro area.  Although there was significant price variation among providers, the study found very little variation in available quality metrics. 

A variety of factors likely influence the variations in price for the same medical service from provider to provider. The Division’s report was not intended to analyze those variations, but the data helps to inform a broader analysis of health care cost trends and the need for urgent action to address underlying factors that contribute to high health care costs. Both reports released today illustrate that swift passage of the bill Governor Patrick filed in February to control rising health care costs and improve patient care is imperative. The bill, “An Act Improving the Quality of Health Care and Controlling Costs by Reforming Health Systems and Payments,” establishes a structure and process to facilitate significant reforms to the Commonwealth’s health care payment and service delivery systems over the next three years. To make this vision a reality, legislation to reform the way we pay for care is needed now.

To learn more about the Governor’s cost containment legislation, please visit the Governor’s website.

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