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In A Decade, Employee Premium Bills Triple; Hospital Co-Pays Rise Sixfold

I wouldn’t want to be the proofreader at the state Division of Health Care Finance and Policy. They seem to be putting out major reports every couple of days lately, including Friday’s on hospital finance. And most of the news, though valuable, is pretty depressing, documenting that eternally rising health cost curve. The latest is the update on employers and health insurance, known as the Massachusetts Employer Survey, and the findings include:

More than three-quarters (77%) of employers with three or more employees offered health insurance coverage to their employees in 2010, compared with 69% of employers nationwide.

The majority of employees who are eligible for their employer’s health insurance coverage enroll in the plan (75%).

Employee contributions toward health insurance have been steadily rising. Between 2001 and 2010, the median employee dollar contribution towards health insurance premiums tripled. Employers contributed 75% and 70% to individual and family plans respectively in 2010, an increase from the 72% and 68% rates for 2009, but lower compared to 82% and 75% in 2001.

Since 2001, emergency room copayments have more than tripled, copayments for inpatient hospitalizations have risen six-fold, and copayments for prescription drugs have doubled.

92% of employers not offering health insurance in 2010 report that they do not offer insurance because premiums are too high.

Anybody notice anything else that ought to be highlighted in this report? Please comment below. Meanwhile, here’s more bad news: median monthly family premiums have hit $1,262:

The ‘Political Theater’ of Massachusetts Health Reform

Former Connector chief Jon Kingsdale


Jon Kingsdale is best known as the man who got the Massachusetts “Connector,” the first health insurance exchange in the nation, off the ground. Who knew that he was also a blogger extraordinaire? Don’t miss his new post, “Hypercostitis: Political Theater in Massachusetts” on the blog of the journal Health Affairs.

Jon makes no pretense of being a member of the elite buns-of-stone corps who sat through all four days of last month’s state hearings on health cost trends, but he draws on Health Care For All’s coverage to reach some conclusions:

Covering all four days of hearings in excruciating detail, HCFA’s blog called it “Boot Camp” for policy wonks. I call it political theater. It was this same sort of political show, staged over years at the JFK Library, which contributed to the enactment of near-universal coverage in 2006.

And:

Most of the substantive testimony at last week’s hearings focused on the twin culprits of fee-for-service reimbursement and hospital/physician consolidation. Building on a tradition of political theater, Massachusetts is poised to confront the evil twins of medical excess. Whether we do so, or dance around that political challenge, will be revealed in the next (legislative) act.

Jon has some other great turns of phrase; I particularly liked his summing up of the problem that hospitals with more clout can command higher prices from insurers: “The big get richer, and the rich get bigger! No wonder that three of the four hospital CEOs at last week’s hearings—all but Partners CEO Gary Gottlieb—called for government intervention to reduce such pricing disparities. (Now that’s theater!)” Continue reading

Health Care Chiefs On The Spot: Cost Trend Hearings, Day 2

So why are Partners hospitals so expensive? And why do health insurers pay so much more to one hospital than another? And why should low-paid Lawrence General Hospital get paid more if it’s earning good profits even now?

Michael Bailit, president of Bailit Health Purchasing, might want to consider a second career in television journalism. Fairly but unsparingly, he asked some of the leaders of the Massachusetts health care establishment today difficult questions that cut to issues at the heart of the state’s ever-rising health costs. Watching them answer made this morning’s Day 2 state hearing on health care cost trends actually, even, kind of fun. (If I feel this way, does it mean I need help?) Our Day 1 coverage is here and here.

Above, Partners HealthCare chief Dr. Gary Gottlieb answers Michael’s question about why costs are high at Partners. To sum up his answer in a word: Investments, in everything from technology to training to safety. Michael also pressed Gary a bit on whether some price variations are “unjustifiable.” What’s unjustifiable, Gary responded, is the underpayments to some high-quality hospitals. Michael: Can there be such a thing as overpayment? Gary: “Absolutely.”

Below, Tufts Health Plan chief James Roosevelt Jr. explains why Tufts pays more to one hospital than another of comparable quality, and admits in so many words, “Sometimes we pay higher payments because of market power.” Attorney General Martha Coakley’s report last week implicated the market clout of some health care providers as a key cause behind high payments that are helping to fuel rising overall costs.

And here, Lowell General Hospital’s president, Normand Deschene, explains why he thinks his hospital should be paid more. Continue reading

Rising MA Health Costs: The ‘Market Distortion’ Factor


Following up on new state numbers on the drivers of health costs in Massachusetts, WBUR’s Martha Bebinger reports this morning:

A new state report out this morning is shedding some light on the vexing question: What exactly is driving up health care costs in Massachusetts?

The report says the answer depends, in part, on who is paying the bill. In government health plans — Medicare and Medicaid — rising costs in recent years were largely based on how much care patients received. In commercial health plans, high prices were the driving factor.  Massachusetts Association of Health Plans president Lora Pellegrini says the report proves the need to address prices at high-cost hospitals before the state worries about how to pay for health care.

“We absolutely need to fix these market distortions first, to lay a solid foundation for payment reform or else we’ll just be memorializing high payments in a new system,” she said.

The Incidental Economist also weighs in on a similar theme here; Kevin Outterson writes:

I predict some will claim this proves RomneyCare was mistaken. The report is best understood as additional evidence of provider market power in Massachusetts. We should be talking about how to address this market competition problem.

Gorgeous Globe Graphic On Hospital Costs


Graphic artists tend to be unsung heroes in newsrooms, so let’s take a moment and thank Patrick Garvin and Daigo Fujiwara of the Boston Globe for their glorious interactive graphic laying out with colorful clarity the differences in prices among Massachusetts hospitals. Click here to play with it.

It’s not that we didn’t know that prices for the same, high-quality procedure vary dramatically, and sometimes inexplicably, from hospital to hospital. It’s that now we can see it, and even click on the procedure we’re wondering about and compare. Readers, what strikes you?

Personally, I found a surprise in almost every list. Why is it more expensive to have a normal baby delivery at St. Elizabeth’s Medical Center than at Mass. General? Why is a gall bladder removal at Newton Wellesley more than $3,000 cheaper than at Charlton Sturdy? Why is Berkshire Medical Center most expensive for obesity procedures?

We already had the state’s MyHealthCareOptions site for some limited comparisons among hospitals, but as more and more of this cost data comes out, the bigger picture comes ever clearer. (Credit, too, of course, to the Sisyphean data-crunching of the state Division of Health Care Finance and Policy.) Now the question becomes: How will this emerging picture affect policy-makers’ decisions in the coming phase of reform?

(Hat-tip to Chelsea Conaboy for calling attention to the graphic. If I ran boston.com, I’d play it up.)