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May 14, 2021
Peterson-Milbank Program for Sustainable Costs Peterson-Milbank Program for Sustainable Health Care Costs
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In April, the Massachusetts Health Policy Commission (HPC) voted to maintain the state’s health care cost growth benchmark at 3.1% for calendar year 2022, which will mark a decade since the state established a target for sustainable cost growth.
The HPC’s April vote followed the release of the state’s annual report on the performance of the health care system, which demonstrated that Massachusetts exceeded the 3.1% benchmark for the 2018–2019 period with actual spending growth of 4.3%. During the 2018–2019 period, commercial spending growth in Massachusetts was driven primarily by hospital outpatient services (7.6% per person) and physician and other professional services (6.1%), while Medicare growth in the state was driven by hospital outpatient services and prescription drugs.
Despite these concerning trends, annual health care spending growth in Massachusetts averaged 3.59% between 2012 and 2019 – a rate 0.6% slower per year than the rest of the United States. In addition, since the benchmark was established in 2012, commercial medical spending growth in Massachusetts has been below the US growth rate every year, resulting in $9.3 billion in cumulative “savings,” or avoided spending, as compared to the United States.
To realize the vision of advancing a more transparent, innovative, and equitable health care system, the HPC applies four core strategies: (1) monitoring market transactions and performance; (2) researching and reporting on data trends and insights; (3) convening health care stakeholders to discuss opportunities for improving care and reducing costs; and (4) partnering with the health care system to invest in innovative, cost-effective care.
Coleen Elstermeyer, MPP, is the deputy executive director and David Seltz is executive director of the Massachusetts Health Policy Commission
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