Table of Contents
BE CAREFUL what you would like for.
After years of ever-increasing spending on well being care that left policymakers struggling to include prices, Massachusetts lastly discovered the important thing to reducing spending on well being care: a worldwide pandemic.
Sarcastically, spending on well being care declined by 2.4 p.c in Massachusetts in 2020, an unprecedented drop that may be attributed to fewer folks in search of care throughout the COVID-19 pandemic, based on a report launched Monday by the Heart for Well being Info and Evaluation.
In fact, a pandemic will not be what policymakers had in thoughts after they searched for methods to include well being care prices, and the delays in in search of care have had myriad undesirable penalties for people and the well being care system, together with folks getting sicker from untreated illnesses.
“This isn’t how folks deliberate to scale back spending,” mentioned Ray Campbell, govt director of the Heart for Well being Info and Evaluation. “In the event you may select to scale back spending it wouldn’t be on this indiscriminate manner.”
The 133-page annual report from CHIA gives probably the most complete look but at how the pandemic affected well being care spending within the state.
But Campbell cautioned that due to the disruptions to the well being care system in 2020, it’s laborious to attract conclusions about well being care traits shifting ahead with out a number of years of information. “We expect that greater than every other 12 months you actually must look previous the 4 corners of our report to consider what it means and the implications of it,” he mentioned. “You don’t wish to draw lots of conclusions from simply the 2020 information as a result of it was such a unprecedented 12 months.”
Massachusetts traditionally has had a number of the nation’s highest well being care spending. Earlier than the pandemic, spending was steadily growing annually, regardless of efforts by lawmakers and administration officers to restrict the expansion. Price-cutting efforts during the last decade led state well being coverage officers to set a development goal of both 3.1 p.c or 3.6 p.c annually between 2013 and 2020, a measure the state has usually exceeded.
But in 2020, the 12 months when COVID-19 hit in March, whole spending on well being care in Massachusetts was $62.6 billion, or $8,912 per resident – which represents a drop of $0.4 billion or 2.4 p.c in comparison with 2019. Spending dropped regardless of Massachusetts’ inhabitants rising by 2 p.c throughout that point. It’s the first time since CHIA began measuring eight years in the past that well being care spending decreased.
Spending on doctor companies dropped by 12 p.c, spending on hospital outpatient companies dropped by 11.1 p.c, and hospital inpatient spending dropped by 1.8 p.c.
A serious motive was that between March 15 and Might 18, 2020, Gov. Charlie Baker ordered hospitals to postpone nonessential, elective procedures with the intention to preserve personnel and sources for what was anticipated to be a surge of COVID sufferers. Even after procedures have been allowed to renew, many sufferers feared going right into a medical workplace as a result of they didn’t wish to catch COVID. For instance, information within the report present that preventative screenings for a wide range of ailments that required in-person visits have been down in 2020. (Behavioral well being follow-up visits truly elevated, presumably as a result of they could possibly be achieved through telehealth.)
There was additionally a 14 p.c discount in days spent in nursing properties. The report attributes this to a number of elements, together with COVID-related freezes on admissions, fewer folks being discharged to nursing properties from hospital care, and lots of nursing house residents dying of COVID.
One space that did see a rise in spending was on pharmaceuticals, in keeping with traits in prior years. This will likely even have been affected by COVID-related insurance policies, which let folks get a 90-day provide of medication without delay fairly than the everyday 30-day provide, and let sufferers renew prescriptions through telehealth.
The report additionally documented a big shift in who paid for care. Between 2019 and 2020, the portion of well being care spending paid by people with industrial insurance policy – by means of deductibles, co-pays, and the like – dropped by an unprecedented 17.2 p.c. This can be a break from previous years, throughout which the quantity people had been paying out of pocket for medical care had been steadily growing. In response to the report, the decline was pushed by folks utilizing much less well being care and by mandates that required insurers to cowl companies like COVID checks and COVID therapy with out copays.
There was additionally some migration of individuals off industrial plans and onto public plans like MassHealth, in all probability as folks misplaced jobs and revenue. The variety of folks with personal insurance coverage protection dropped by 2.6 p.c between March 2019 and December 2020, to round 6.5 million, whereas the variety of folks with public insurance coverage grew by 8 p.c throughout that point, to 2.5 million.
Clearly, these shifts have monetary implications not just for people but in addition for hospitals and insurers. The CHIA report discovered that hospitals completed the 12 months incomes a median revenue of two.6 p.c, however solely due to federal aid funding. With out that extra cash, hospitals would have misplaced cash in 2020.
Insurers benefited from the decrease use of medical care. The portion of premiums that was surplus or used for administrative bills elevated by 35.4 p.c to $85 per member monthly. Below federal and state legislation, a number of the extra cash should be returned to members over a three-year interval. Well being care premiums grew by 2.6 p.c in 2020, however these premiums have been set earlier than COVID hit.
Amy Rosenthal, govt director of Well being Look after All, a well being care client advocacy group, mentioned regardless of the bizarre nature of 2020, there are a number of factors within the report “that stay troubling for shoppers.” These embrace the rise in prescription drug spending; the sum of money retained by insurers; and a unbroken pattern in enrollment in high-deductible well being plans.
Correction: The scale of the excess retained by insurers was corrected.