The heat keeps getting turned up on Massachusetts hospitals and health insurers as rising health care prices eat deeper into the budgets of working families, small businesses, and governments.
While other states will start insuring more residents this fall under the US health care overhaul, Massachusetts — which expanded health insurance access through its 2006 law — has moved past enrollment to grapple with an even more intractable health care problem: exorbitant costs.
State lawmakers passed a cost containment law in 2012 that attempts to limit medical expense increases to the Massachusetts economic growth rate, projected at 3.6 percent this year. The success of efforts to reach that target can’t be gauged until 2014, but pressure already is mounting on doctors, hospitals, and insurers to get prices and premiums under control.
“The work that we do is being watched closely nationally,” said David Seltz, executive director of the new Health Policy Commission, a watchdog agency created by last year’s state law. Standing before the top executives of eight of the state’s largest hospital systems and health insurance carriers at a Boston forum last week, Seltz said, “We need to trust what many of the [health care leaders] have said, but we also need to verify.”
Seltz was referring to the answers given by the chief executives to pointed questions posed by members of the Greater Boston Interfaith Organization about what steps they were taking to restrain health costs. Many of their answers, offered during the often emotional session at Temple Israel in the Longwood Medical Area, had a self-congratulatory tone.
One trend likely to draw questions at future meetings is increasing consolidation at Bay State hospitals.
“We’ve started to redesign the way that we provide care,” said Gary L. Gottlieb, chief executive of Partners HealthCare System, which operates Massachusetts General and Brigham and Women’s hospitals, two of the state’s highest paid health care providers.
“We expect absolutely that in 2013 we’ll be below the state benchmark” for total medical expense increases, Gottlieb said.
“Our administrative costs of approximately 10 percent [of revenues] are by far lower than plans anywhere else in the country,” said James Roosevelt Jr., chief executive of Tufts Health Plan in Watertown, the state’s third largest health insurer.
In stark contrast, patients and business owners said the cost of care — as well as the medical bureaucracy — has become an albatross for ordinary people and a drag on the economy.
Myron Miller, principal in the Boston architecture and planning firm Miller Dyer Spears Inc., which has about 40 employees, said the firm’s health premiums have climbed an average of 10 to 20 percent annually for the past decade, nearly tripling over the past six years alone. To compensate, he said, Miller Dyer Spears has moved to health plans with higher deductibles, requiring its employees to contribute more to their insurance.
“The result has been a continued erosion of benefits,” Miller told more than 150 people at the interfaith forum. “The net effect is the firm has fewer resources available to increase employee salaries and bonuses. We’ve reached the limit of our ability to fund the increases.”
Charlene P. Harper, an athletic trainer from Natick, said her dealings with the health care system have been nightmarish. Dealing with her 14-year-old daughter’s chronic kidney condition has meant “invasive duplicative testing” and rising costs for everything from medical records to parking at Boston hospitals to food in the hospital cafeterias, Harper said.
“The frustration that I have is there is no information sharing” between doctors and specialists from different hospital systems, she said. “Cost has become a prohibitive issue for me. Medical records can cost anywhere between 95 cents and $1.40 a page. My daughter’s records, including X-rays, cost $3,500. They will not give it to me unless I pay for it.”
Holding up a thick stack of bills and insurance statements he received in the past eight months for his wife’s medical care, the Rev. Burns Stanfield, pastor of Fourth Presbyterian Church in South Boston and president of the interfaith group, said, “There’s a lot of money here, and a lot of complexity.”
The meeting at Temple Israel marked the first of several health-cost events scheduled in coming weeks. The Health Policy Commission will hold two days of cost trend hearings Oct. 1 and 2 at the University of Massachusetts Boston to question some of the same business leaders — and others — about what they are doing to cut costs.
One trend that is likely to be talked about is the ongoing wave of hospital consolidation, an issue that didn’t come up at Temple Israel. The commission has launched a cost and market impact review of Partners’ bid to acquire South Shore Hospital in Weymouth, a proposed takeover that is also being investigated by the antitrust division of the Justice Department and state Attorney General Martha Coakley’s office.
“We’re concerned not only about Partners, but about the whole restructuring of the health care landscape,” said Stuart Altman, chairman of the state commission. “One of the reasons that Massachusetts is so expensive is that we disproportionately use our most expensive facilities for routine care. That’s where the money goes.”
To lower prices, Altman said, the commission wants providers to offer more basic care in community settings, and use Boston teaching hospitals only for more complex services.