Massachusetts Seeks Causes of Soaring Health Costs for Employers

Posted by Eileen McAnneny on Mar 22, 2010 12:26:00 PM

The debate over health care and health insurance costs in Massachusetts intensified last week as state regulators held three days of hearings to identify the factors causing prices to skyrocket for employers and consumers. Senate President Therese Murray, meanwhile, suggested that lawmakers will pass caps on payments to doctors and hospitals before the end of the legislative session.

The first annual Health Care Provider and Payer Costs and Cost Trends hearing was held by the Division of Health Care Finance and Policy ("DHCFP") in conjunction with the Attorney General's office.  The three-day hearing, more closely resembling a policy conference than a "grilling under oath," was required by Chapter 305 of the Acts of 2008.

The hearings came less than a week after Associated Industries of Massachusetts announced a comprehensive proposal to control soaring health insurance costs for small employers while business, government and health care providers develop long-term solutions to the problem.  Much of the testimony at the DHFCP hearings underscored the objectives of the AIM proposal, which calls for regulators to limit - temporarily - reimbursements to doctors and hospitals to the median cost for individual medical services in 2009.

DHCFP Commissioner David Morales kicked off the hearings, after which there were introductory remarks by the Senate president, the governor and the legislative chairs of the Health Care Financing Committee, Senator Richard Moore and Representative Harriett Stanley.  Each made the economic development case for addressing health care costs, particularly for small businesses.  Senate President Murray implored that once the hearings were over, "we act quickly and decisively."

The lineup of non-elected testifiers included national health-care policy experts who set the stage by providing data, statistics and context for the hearings.  The consultants used by DHCFP presented data on health insurance premium trends as well as an analysis of claims data.  Attorney General Martha Coakley presented the findings of her report on cost drivers.  The most noteworthy finding, and the subject of much discussion over the course of the hearings was the fact that the primary driver of rate reimbursement disparity was the market power of providers. 

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Topics: Associated Industries of Massachusetts, AIM, Massachusetts employers, Health Insurance, Health Care, Massachusetts, Business Costs

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