Massachusetts Commission Makes Affordability, Equity Recommendations

Oct. 23, 2023
Health Policy Commission recommends creating a benchmark that tracks indicators of affordability, including the impact of both health plan premiums and consumer out-of-pocket spending by income, geography, and market segment

After outlining several areas of excess spending related to unreasonably high prices and avoidable use of high-cost care settings, the Massachusetts Health Policy Commission (HPC) recently made several recommendations related to promoting affordability and advancing health equity.

The HPC is an independent state agency charged with monitoring healthcare spending growth in Massachusetts and providing data-driven policy recommendations regarding healthcare delivery and payment system reform.

The HPC’s 2023 10th annual Cost Trends Report delves into a wide range of topics, including reducing administrative complexity, increasing oversight of pharmaceutical spending, and constraining excessive provider prices.

The report notes that Massachusetts residents are facing high healthcare costs that are consistently increasing faster than wages, exacerbating existing affordability challenges that can lead to avoidance of necessary care and medical debt, and widening disparities in health outcomes based on race, ethnicity, income, and other factors.

As a first step in addressing the issue, the commission recommends establishing new affordability benchmarks. It notes that although healthcare spending by public and private payers moderated in the years following the enactment of Massachusetts’ healthcare cost growth benchmark, health insurance premiums and cost-sharing by individuals and families have frequently increased in excess of the benchmark. “To both complement and bolster the healthcare cost growth benchmark, the Commonwealth should develop an accountability framework for affordability of care for Massachusetts residents, the report says. “As part of a strategy that tracks improvement on indicators of affordability, including the differential impact of both health plan premiums and consumer out-of-pocket spending by income, geography, market segment, and other factors, an affordability index should be measured annually in a benchmark-like process.”

The commission also suggests that the Commonwealth could improve health equity though premium support for employees with lower incomes. “As the number of Massachusetts consumers with high-deductible health plans (HDHPs) has sharply increased, the HPC has documented increasing challenges to affordability, equitable access, and experience of care, particularly for employees with lower incomes. Total healthcare spending, including premiums and cost-sharing, consumes more than 20 percent of total compensation for middle class families, squeezing household budgets. Employers and health plans could improve health equity by reducing premium contributions for lower wage workers via tax credits or wage-adjusted contributions.”

To further embed the goal of advancing health equity in the state’s policy framework, the commission suggests that the Commonwealth should undertake a coordinated effort across state agencies and sectors, both in healthcare and in other key sectors such as education, housing and social services, to identify high-priority areas of health inequities, set measurable goals for improvement, develop a framework for accountability, and report annually on progress. To enable public transparency and accountability, the state’s performance on health equity benchmarks and other measures should be incorporated into the Center for Health Information and Analysis’ Annual Report and the HPC’s Annual Cost Trends Hearing.

The report suggests that payers and providers should continue adopting and building on current efforts to create accountability for health equity via payer-provider contracts, including by requiring stratification of performance data by race/ethnicity and tying payment to performance on health equity targets. Alternative payment model contracts, in particular, offer opportunities to align incentives to motivate investments in services and infrastructure (e.g., care coordination, integrated technology, and performance reporting) aimed at addressing health inequities within patient populations, the report said.  

To implement these health equity goals, the HPC said that policymakers, providers, and payers should commit to the adoption of the data standards recommended by the Health Equity Data Standards Technical Advisory Group of the EOHHS Quality Measurement Alignment Task Force. Universal adoption of these standards would enable efficient and consistent collection of reliable, standardized patient data on race, ethnicity, language, disability status, sexual orientation, gender identity, and sex to inform the integration of equity considerations into quality improvement, cost-control, and affordability initiatives.

\To support providers in developing innovative solutions to achieving health equity, the Legislature should expand the approved uses of the Distressed Hospital Trust Fund and Payment Reform Trust Fund to include supporting innovative initiatives focused primarily on addressing inequities in health and health care.

Despite the Commonwealth’s strong overall performance in measures of maternal health, recent data indicate significant, persistent inequities in maternal health outcomes, the HPC said. As part of a broader effort to address these outcomes, the Commonwealth should ensure that efforts to address health care workforce challenges encompass investments to expand and diversify the workforce of doulas and midwives.

Finally, the HPC stressed that health plans should continue to promote the increased adoption and effectiveness of alternative payment models, especially in the commercial market where it says expansion has stalled. “Plans should leverage multi-payer alignment opportunities, to unify APMs across MassHealth, Medicare, and commercially insured populations for participating practices.”

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