Employers, Consumers Hold Key to Resolving Health Cost Crisis

Posted by Eileen McAnneny on Jun 28, 2011 1:11:00 PM

Massachusetts will solve its health-care cost crisis only if employers and consumers become engaged in the issue and change the way they purchase medical services, AIM President and Chief Executive Officer Richard C. Lord told a state hearing this morning.

Employers' Campaign for Affordable Health“Doctors, hospitals and insurers in Massachusetts are moving aggressively to change the financial model of health care in a way that will reduce expenditures. The ultimate success of those changes will depend upon the ability of employers and citizens to evaluate the cost and quality of their health care in the way they do for cars and other purchases,” Lord said at the annual health-cost trend hearings sponsored by the Massachusetts Division of Health Care Finance and Policy.

Lord said AIM recently established the Employers’ Campaign for Affordable Health to help businesses and their employees become informed health-care consumers. The AIM educational effort – which will include Web resources, online programs and seminars - is expected to resemble the campaign the association undertook to explain the 2006 Massachusetts Health Care Reform Law.

Lord’s comments echoed a report issued last week by Attorney General Martha Coakley urging consumers to shift the manner in which they purchase health care to align payments with value – measured by factors such as reasonable cost and good quality of care.

“It is essential that businesses and consumers be engaged in efforts to promote a value-based health care market,” the report said.

Lord said three of Coakley’s conclusions hold particular interest for employers seeking to reduce health insurance costs:

  • There is wide variation in the payments made by health insurers to providers that is not adequately explained by differences in quality of care;
  • Tiered and limited network products have increased consumer engagement in value-based purchasing decisions; and
  • Health care provider organizations designed around primary care can coordinate care effectively.

“The central message to employers and to employees is this: the more affordable medical care provided by tiered networks does not equal bad medical care,” Lord said.

Private group health insurance premiums in Massachusetts grew by 5 percent to 10 percent annually when adjusted for benefits from 2007 to 2009, far outpacing growth in the Consumer Price Index in the Northeast over the same period. Private payer health spending increases were driven largely by provider price increases, while smaller growth rates in the public sector were attributed to increased utilization.

Governor Deval Patrick and key state legislators who spoke at the health-cost hearings Monday affirmed their determination to address the surging medical costs that continue to impede the economic recovery. The governor left little doubt that he wants a cost-reform bill on his desk before the end of the year.

“We need the Legislature to get me final legislation for signature this fall because the cost trends we are discussing today are about more than numbers and data sets. They are about people and their most urgent needs,” Patrick said.

Employers looking for a “plain English” summary of the health cost debate and what it means to their companies are invited to join AIM for a free Webinar on July 6 from 9-10 a.m.


Topics: Associated Industries of Massachusetts, Health Care Costs, Deval Patrick, Richard Lord

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