Massachusetts' first annual report on the commonwealth's healthcare market shows a limited movement away from fee-for-service and a market concentrated among a few large payers.
The commercial health insurance market in Massachusetts "remains concentrated with a few large payers that account for the vast majority of enrollees," the state's Center for Health Information and Analysis found. Blue Cross Blue Shield, the largest, accounts for 45 percent of the commercial market, followed by Harvard Pilgrim (20 percent) and Tufts Health Plan (14 percent).
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Commercial reimbursement "continued to be made to high priced providers," the report said. In 2011 and 2012, approximately 80 percent of healthcare spending for acute hospitals and physicians "was concentrated in higher priced providers."
As it broke down among Massachusetts' providers, 31 percent of all private insurance reimbursement for acute hospital care in 2012 went to Partners HealthCare, about 10 percent went to CareGroup, the parent company of Beth Israel Deaconess Medical Center, about 7 percent went to the UMass Memorial Health Care, about 5 percent went to the Lahey Health, about 5 percent went to the Steward Health Care and the rest went to independent providers.
There report also found that while there has been some transition from fee-for-service to alternative payment models in recent years, it has largely been in commercial HMO products.
In 2012, almost 40 percent of all commercial payments were made through a "global payment/budget framework," all within HMOs, while the rest was fee-for-service reimbursement. Blue Cross largely led the state in moving towards accountable care, with 49 percent of all payments in 2012 made through a global budget.
Other report findings include:
- Between 2009 and 2011, average insurance premiums for Massachusetts residents increased 9.7 percent, while benefit values decreased 5 percent.
- Most Massachusetts residents, about 62 percent, are insured through their employer, and nearly half the commercial market is self-insured.
- Employees in Massachusetts, as elsewhere, "are paying increasingly more out-of-pocket for their health care," with deductibles increasing 40 percent between 2009 and 2011.
- Spending for commercially-insured Massachusetts residents increased 3.8 percent between 2010 and 2011.
The report comes ahead of state hearings this fall on healthcare costs specifically and, in general, implementing Chapter 224, the payment reform law signed last year that's intended to save $200 billion over 15 years.
Massachusetts has the second highest per capita healthcare spending in the country – $9,278, based on 2009 data – and the state government is banking on the reform law establishing accountable care budgeting in public programs and tying healthcare spending increases to gross state product.
Through 2017, the law calls for the growth rate of healthcare spending in the state to be tied to increases in gross state product, and for 2018 through 2022 calls for spending growth to be set "at, or slightly below," gross state product.