Health Care In The States

Report: Mass. Residents Paying More, Getting Less From Health Insurance

By Martha Bebinger, WBUR

August 14th, 2013, 3:20 PM


If Massachusetts residents have the feeling they’re getting less coverage from their health insurance even though it’s costing more, there’s now evidence that they’re right.

A state report says Bay State premiums rose 9.7 percent between 2009 and 2011, while the value of that coverage shrank 5.1 percent.

“What we’ve seen over the last couple of years is that premiums are growing faster than inflation and at the same time, the quality of the benefit is declining,” said Aron Boros, whose state agency, the Center for Health Information and Analysis, published the report. “So you’re not only paying more, you’re getting less.”

The gap between what consumers get and what they pay is widest for individuals who buy insurance on their own and for small businesses who have fewer people to buffer the impact of health care costs.

There are lots of reasons health care premiums continue to rise. But Boros says there’s one particularly thorny issue in Massachusetts: Residents get most of their care at the most expensive hospitals, instead of going to the nearest community hospital for the basic stuff like mammograms, check-ups and routine surgery.

“If you want to contain costs or reduce costs, you have to go after where the costs are,” Boros said. “The vast majority of costs are in high-priced hospitals and physician groups.”

Specifically in Partners HealthCare, which Boros says takes in 28 percent of all payments to hospitals and doctors in Massachusetts. But Partners is also the state’s largest private employer. It and many other high-priced hospitals spawn medical innovations and drive the state’s health care industry.

Proportion of total reported acute hospital and physician paymants by system (2011) (Courtesy Center for Health Information and Analysis)

The report out Wednesday lays the foundation for health care cost hearings this fall run by the state’s Health Policy Commission. Its director, David Seltz, says there will be lots of tough questions for hospitals and physicians, including, “Why are these trends existing, what are they doing to mitigate them in the long term, and what are the places where the commonwealth can help and push this industry to achieve some of those efficiencies?”

Expect the pressure to continue on patients as well to make “smart” choices about where to get care.

“There is a strong push towards getting the patient more involved by providing better tools and better incentives through limited and tiered networks and high deductible plans,” Boros said. “But we’re at the infancy of those things.”

By October, health insurers in the state are supposed to have a website and phone number you can call to get the price of any treatment you need. When you’re choosing where to go, ask how the quality compares as well as the price.

There are a handful of other nuggets that stand out in the report:

  • 39 percent of the payments private insurers make are within a global budget. But enrollment in HMOs, where global budgets are used, is dropping. Is this a sign of patient backlash?  Boros doesn’t know.
  • Blue Cross Blue Shield, Harvard Pilgrim and Tufts Health Plan have 80 percent of the commercial market even though they are the most expensive insurance options in the state. Why aren’t employers trying low-cost options?
  • Half the commercial market is self-insured. This has been true for couple of years, but it’s still surprising.
  • On average, commercial insurers spent $414 per member per month, but among insurers there is a wide range — from $196 at Cigna to $434 at Harvard Pilgrim.

This story is part of a partnership that includes WBUR, NPR and Kaiser Health News.

20 Responses to “Report: Mass. Residents Paying More, Getting Less From Health Insurance”

  1. Anti-tea bag says:

    Sounds like Massachusetts needs to take a page out of the Vermont play book and begin to consider going full blown single-payer.

  2. Anti-tea bag says:

    Give free market capitalism a chance and it will find a way to corrupt anything.

  3. Sorry, Anti-Tea Bag, but there’s no free market capitalism here in Massachusetts. The state of Massachusetts has been trying to micro-manage and central plan health care for 30-40 years, with all attempts — including the penultimate one, RomneyCare, having failed. The most recent attempt — passed in 2012 — at central planning is a weak form of price fixing which appears to be (too early to say for sure) also failing. There is a good bet it will because it failed back in 1988 when Governor Dukakis tried it.

    But the Vermont system doesn’t have a prayer here. It’s been priced out as costing three times in taxes what we in Massachusetts already pay (gross before the savings in premiums; in the end it would probably cost 50% more than we now pay in taxes and premiums combined). In fact, my understanding (quick reading of some UMass research commissioned but initially held back by VT governor) is that it can’t get off the ground in Vermont either.

  4. Anti-tea bag says:

    What do you want, higher premiums or higher taxes? If we continue to allow the private insurance companies to run the show, we will continue to see ever rising premiums. Private insurers don’t care about rising premiums as long as they can skim a profit. If we go with a universal single-payer system, we will pay higher taxes that will take the place of the ever rising insurance premiums because a single-payer system spells the end of the private health insurers. Take your pick. We either place our trust in the private insurance companies or we place our trust in the government. At least with the government, we have some control at the ballot box. With private insurers, we are at their mercy.

  5. Kenneth says:

    Vermont’s single-payer priced out at three times in taxes? Sorry Dennis, that statement doesn’t pass the smell test. I’m afraid you’ll need to provide some references because I’m reading articles that claim Vermont’s single-payer plan costs much less than any traditional health insurance coverage. None of the Vermont insurance companies can’t compete with a state run single-payer plan because the big savings comes from the non-profit model. Sounds like the same old Republican naysaying rhetoric, if you ask me. Dude! It’s played! Get a new tune!

  6. Daniel says:

    It’s a shame that WBUR chose the headline that it did. The biggest takeaway of the report is how hospital systems, namely Partners, use their market power to demand extremely high payments. But I guess that doesn’t rile up readers like good ol’ fashioned insurer bashing.

  7. James says:

    Liberals think Free Market solutions are more corrupt that Government solutions? Amazing. Look at Europe. Big Government is always a bad idea, always. Just do some reading.

  8. kelly says:

    Just do some reading? What? Ayn Rand? FACT: Free markets are always driven by profits. Profits always degenerate into greed. Greed always corrupts. Always! Me thinks you read too much Paul Ryan!

  9. Matthew says:

    Vermont is not “full blown singl payer” since private insurers can continue to operate in the state indefinitely, it does not technically fit the definition of single-payer.

  10. Cynthia says:

    If everyone stopped playing politics and used objective analysis with outcome measurements, we, as a nation might be able to get a program that resolves this very real and needs to be debated issue. People are weighting in by choosing what they think is better. Humm, yes I looked at healthcare in other countries. Not impressed. Think, research, and know what is outside of your pocket and political issues.

  11. Mike says:

    Let’s not forget that these Mass. carriers are still losing tons of money from Governor Deval Patrick’s election-saving decision to deny 256 rate increases simply to get re-elected two years ago. Anyone who knows anything about insurance company finances knows that once you start losing money, raising rates fast enough to compensate is almost impossible.

    Patrick’s irresponsible actions for his own selfish purposes disrupted the flow of money that finances almost all health care in Mass. They should be unsurprised that rate increases now are larger to try to get them back on an even keel.

    But by all means, let’s let politicians set rates for EVERYTHING. There’s a good plan.

    M

  12. David Lawrance says:

    This report doesn’t compare Massachusetts performance to other states. It doesn’t compare different funding models. It isn’t a proper battlefield for battling out either Obamacare vs Ayn Rand or Massachusetts vs the world.

    The report exposes the spread of costs among provider systems and the variation in the ability of the plans to negotiate rates with them. Notice in the report that Cigna is not the toughest cookie in every market. Are these tmarkets that it is attempting to capture by accepting higher reimbursements? If so, what is attraction?

    The mix of product types and employer contributions in an insurer’s portfolio are probably also major factors, so it would nice to see how much influence that they exert.

  13. Anti Tea Bag

    Sorry no blood sucking insurance companies here. Over 90% of Massachusetts residents are insured by non profits and most of our facilities are not for profit too . (Most of the exceptions are people who live in Massachusetts but work for large multinationals headquartered elsewhere and therefore have insurance through an out of state for-profit insurer.) Yet we have the most expensive health care in the world. So that does blow the theory that profits are the problem all to hell doesn’t it?

    (In fact, for profit insurers and healthcare facilities basically didn’t exist here until the concept of Romneycare — subsidized insurance — brought them in. The first thing the first for-profit in here did was hire the guy that ran the RomneyCare exchange for Gov. Deval Patrick. Don’t be surprised if they don’t show up as a Deval Patrick client in 2015. The revolving door has begun for Massachusetts.)

    Kenneth

    I was not commenting on the cost of Vermont’s single payer proposal. I was commenting on the cost of a single-payer proposal here in Massachusetts, sent to the legisltature every year for about 20 years now by that one-worlder group of doctors. But the idea has never got out of committee in the State House

  14. Daniel

    The biggest take-away from the Massachusetts report is what wasn’t reported (sorry but it sounds like you only read the story in the Boston Globe). Some of it is in the last four bullets of the WBUR story above but in addition the data in the report was years-old, the report said there has been a 50% increase in uninsured in two years (10 years and billions of dollars wasted to get back where we started), the report said that over 300,000 people that have lost employer sponsored insurance, and that if accountable care is the way to go, 60% of people in Massachusetts (on the commercial insurance side) have already gone that route (and it does not seem to be working).

    In addition, you have to factor what the report said in the fine print or between the lines or didn’t say at all. For example, the state of Massachusetts again changed the goal posts (the metrics used in these supposedly transparent comparative CHIA/DHCPF reports changes almost every year so that it is impossible for the taxpayer to compare). In addition this so-called Annual Report on the Massachusetts Health Care Market covers only half that market. There are other deceitful practices in the report by the top health care propagandist.

  15. The Other Cynthia says:

    Healthcare is the only sector of the economy, besides perhaps defense, that has increased its corporate profits while also increasing its payroll numbers. On the surface, this appears to be good for employment, but dig below the surface a bit and you will realize that this is not a healthy and sustainable way to raise employment. Because federal subsidies are largely responsible for creating most of these job gains in healthcare, the healthcare industry acts as a drain on the rest of the economy, especially in production and manufacturing.

    Take away these subsidies going to healthcare and corporate profits will shrink some and healthcare jobs will shrink even more. But shrinkage in the healthcare jobs market will eventually lead to expansion in jobs in other parts of the economy. It will be painful at first to the healthcare economy, which has had it way to easy for far too long; but in the long run, it’ll be well worth it for the economy as a whole. It’s worth noting that since most of the job gains in healthcare have NOT occurred at the direct patient-care level, if healthcare cuts were to occur, quality of care or access to care won’t be compromised.

  16. Kenneth says:

    Experts, experts, experts! There’s no shortage of experts here on this thread. Yet, not one ounce of truth that can be confirmed with references. My stink meter is pegged! A mediocre fact-checker would have fun on this thread. I have one simple question for most of the people posting comments here. Is it true that a liar’s pants really catch on fire?

  17. Health Care Attorney says:

    During the Presidential campaign of 2012, Liberals argued that Romneycare was the MODEL for Obamacare.

    Game, set, match!

  18. Edward says:

    You wonder if this is a precursor for what other states will face in 2014 and beyond. Guarantee-issue in healthcare has a lot of risk. I fear that the number of enrolled young persons will be much lower than expected. And we know what that means.

  19. Jay says:

    My takeaway from this article is that someone wants to take away my ability to choose where I receive my medical services. The statistics show that people want to receive their healthcare services from facility XYZ, but the author implies that they should instead be receiving their services from facility ABC. Do you truly believe that when left alone people will always make the wrong decision?
    Sorry, you can’t attend that church; you must instead go to this worship facility.
    Sorry you cannot buy that single family home; you must live in this planned urban development.
    That new car you decided was right for your family… Nope, what color Prius do you want?
    That special program at that private college your daughter wants to attend… Uh uh, this state school offers the same program at a lower cost.

    The human ability to discriminate, differentiate, profile, classify, favor, or in summary “to freely make their own decisions” should not be discounted and should never be infringed upon by the government.

  20. Kenneth says:

    Thank goodness with Obamacare we will not need as many health care attorneys, huh?

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