STUART ALTMAN, the chair of the Health Policy Commission, is proud of what the agency has been able to do in Massachusetts to rein in health care costs, but now he says it’s time to move to the next level.
The commission’s traditional focus has been to “analyze what’s going on and point fingers where things can be improved,” as Altman put it. But as part of its cost trends hearing this week, the agency is outlining for the Legislature a new approach to cost control that includes the establishment of price caps on the highest-priced providers in the state.
In an interview on The Codcast with John McDonough of Harvard University’s T.H. Chan School of Public Health and Paul Hattis of the Lown Institute, Altman said the Health Policy Commission has had considerable success in tamping down the growth in costs.
“We’ve been amazingly successful,” he said. “Since 2012, our growth rate has been under that of the US. We are no longer the most expensive state, thanks to the state of Alaska. In addition, our growth rate has almost been in the average for the country, so we’ve been amazingly successful. But it is also the case over the last couple years the growth rate, while not way above what’s going on in the rest of the country, is exceeding what we call our benchmark.”
As Altman sees it, the Massachusetts health care system is over-reliant on its academic health centers, which offer high-quality care but at extraordinarily high prices. He said state residents use these expensive facilities for a disproportionate amount of their health care, even for routine care that could be more cheaply handled at community hospitals.
Altman said all of the academic health centers charge more than community hospitals, but Mass General Brigham, the state’s largest hospital system, and Children’s Hospital charge by far the most. The Health Policy Commission is now recommending price caps for these institutions and Altman said the agency is also reviewing Mass General Brigham’s plan to expand by building new ambulatory care centers in Westborough, Westwood, and Woburn.\
“We have no interest in clipping the wings of our best institutions. We want them to continue to fly, but we want them to fly in an environment that doesn’t destroy the other parts of our health system,” Altman said.
“The top-end institutions, not only do they have high prices but they’re the ones that are financially in the best position,” Altman said. “Many of our community hospitals are teetering on the edge of bankruptcy. It’s forced a number of them reluctantly to either close or affiliate or be bought by the big institutions. In the long run, we don’t believe that’s a model we want to continue.”
Even as Mass General Brigham is running full-page ads trumpeting the benefits of its expansion plans, Altman said the Health Policy Commission is trying to figure out whether the proposed expansion makes sense for the state’s health system as a whole.
“You don’t want to really totally restrict our big institutions from legitimate growth and also to prepare themselves for the next century, which is what they’re saying,” he said. “The question is whether there is a legitimate role to be played by the state beyond what an individual group or a series of groups like Mass General Brigham thinks is in their best interest to do, and that’s what we’re going to be looking at.”
Altman also said the agency needs to dig deeper into the coding system used by health providers to secure reimbursement from insurers. The coding suggests patients overall in Massachusetts are getting sicker with each passing year, but Altman said that’s not the case.
“They admit, in fact, when we talk to them, that our patients aren’t sicker. They say they’re just improving the codes,” Altman said. “Well, give me a break, this has been going on for 10 years and the codes keep implying that they’re sicker. So we want to dig deeper into these codes to see what’s going on. These are codes that have been accepted by the payers, that have been generated by the research community, but we’re very uncomfortable with them. We don’t have a clear indication about how they should be changed but we do know there’s something wrong with them.”
Asked whether a pandemic is a bad time to beat up on the health care sector, Altman disagreed with the premise of the question. “I would say almost the opposite,” he said. “What’s happened in the pandemic is that our bigger, well-funded institutions are doing much better and our poorer hospitals are just surviving and in much worse shape. So the pandemic has made the winners bigger winners and the losers more losers.”
Altman said the state and the country need to figure out a way to slow health care spending from the consumer side. “Unfortunately, the way we’re slowing the spending is by cutting the spending on the part of government, particularly Medicare and Medicaid, leaving the private spending to continue to grow,” he said.
Not only does that approach fail to address the core problem, but it creates a system where those health care providers most dependent on Medicare and Medicaid patients are being squeezed financially, Altman said.
“The pandemic did lay bare what is happening between winners and losers,” he said. “The problem not only in this state but around the country is that what matters to an institution is not whether it’s high quality or low quality but what its patient mix looks like. Those that have primarily private insureds are doing OK and those that are primarily treating Medicare and Medicaid [patients] are not doing OK. I don’t think that’s a healthy environment.”