Attorney General Maura Healey told more than 800 business leaders at the AIM Annual Meeting May 17 that she looks forward to collaborating with employers on key issues such as education, substance abuse, health care and clean energy. Watch her remarks here.
Attorney General Maura Healey told more than 800 business leaders at the AIM Annual Meeting Friday that she looks forward to collaborating with employers on key issues such as education, substance abuse, health care and clean energy.
Noting that she and previous attorneys general have worked closely with AIM on everything from health-care reform to implementation of paid sick days, Healey said the association has always based its advocacy on facts and knowledge.
“We look forward to building on Rick (Lord’s) legacy,” Healey said.
“I am firmly of the view that the problems we face today are not going to be solved by government. They will be solved by all of us working together.”
Healey made her remarks shortly after Lord symbolically handed over the job of president and CEO of AIM to John Regan, who has directed AIM’s government affairs advocacy for the past 12 years.
The attorney general said Lord was one of the first business leaders to whom she spoke when she became a candidate for the office. The two met during a driving snowstorm and spent an extended time discussing the burden that health-care costs placed on employers and the challenges of moderating energy prices.
“Under Rick’s leadership this organization has grown in amazing ways,” she said.
Healey’s collaborative agenda remains ambitious now that Regan is taking the reins at AIM.
She told the audience that the key to maintaining stability in the health-care market is to preserve the federal Affordable Care Act (ACA). Some 2.5 million Massachusetts residents have a pre-existing medical condition and 400,000 gained health-insurance coverage through the Medicaid expansion made possible by ACA, according to Healey.
The attorney general also noted the support of the Massachusetts business community for civil rights, stretching from the Goodridge decision establishing marriage equality to opposing a question on the 2018 statewide ballot that would have rolled back protections for transgender individuals.
She decried the new Alabama law restricting access to abortion by making an economic argument. Women are more than half the population and half of the work force, so anything that prevents women from full participation in the employment market will impede economic growth.
Healey concluded by saying that the commonwealth’s formula for funding education must change.
“Your zip code should never determine the quality of education you receive,” she said.
Health-care spending in Massachusetts grew less than a key state benchmark and less than the national average during 2017, but employers and workers are not yet seeing the benefits.
The annual Health-Care Cost Trends Report issued today by the state Health Policy Commission (HPC) indicates that total per-capita health-care expenditures in Massachusetts rose 1.6 percent during 2016, significantly less than the 3.6 percent benchmark set by the commission. The Massachusetts growth rate also fell below the national rate - 3.1 percent – for the eighth consecutive year.
But the health-insurance premiums paid by Massachusetts employers and employees increased 5.8 percent in 2017, leaving the average total premium for employer-based coverage among the highest in the country at $21,000 per year for a family plan and $7,000 for a single employee. These figures do not include out-of-pocket spending such as co-payments and deductible spending, which grew 5.9 percent in 2017 for commercially-insured enrollees.
Premiums for smaller employers increased 6.9 percent and are now the second highest in the country, according to the HPC. Fifty-seven percent of small-firm (1-50 employees) employees are enrolled in high-deductible health plans.
“AIM-member employers told us in a recent survey that the rising cost of providing health insurance to employees is their biggest concern,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts and a member of the Health Policy Commission.
“The HPC report contains good news about health-care expenditures, but also underscores the need to look at issues such as price variations among doctors and hospitals that are driving up insurance premiums.”
Part of the reason that employers are not seeing more benefit from moderating health spending may be the fact that commercial insurers in Massachusetts pay higher prices to providers than Medicare pays for the same services. For hospital inpatient care, average prices among the three largest Massachusetts insurers were 57 percent higher than Medicare prices for similar patients ($15,913 versus $10,117, respectively).
Commercial insurers also paid considerably more for typical outpatient services, including brain MRIs, emergency department visits, and physician office visits.
The HPC attributed much of the overall increase health-care expenditures to spending on prescription drugs (4.1 percent) and hospital outpatient services (4.9 percent). The commission also found that medical bills can vary as much as 30 percent from one hospital or medical group to another with no measurable different in quality of care.
The HPC makes 11 policy recommendations to continue health spending moderation. Highlights include:
Unnecessary utilization: The Commonwealth should focus on reducing unnecessary utilization and increasing the provision of coordinated care in high-value, low-cost settings. Payers and providers should reduce the use of avoidable high-cost care such as emergency department (ED) visits, behavioral health-related ED visits, readmissions, use of teaching hospitals and academic medical centers for community-appropriate inpatient care, and institutional post-acute care by ensuring access to high-value, low cost settings, and for shifting care, as appropriate, to these settings.
Provider price variation: Policymakers should advance specific, data-driven interventions to address the pressing issue of continued provider price variation in the coming year.
Alternative payment methods: The Commonwealth should continue to promote the increased adoption of alternative payment methods (APMs). Also, as part of a strategy to reduce spending, payers should develop plans to lessen the unwarranted disparities in global budgets paid to different providers by establishing stricter targets for spending growth for highly paid providers, by moving away from historical spending as the basis of global budgets, and by using bundled payments for certain care episodes where evidence has shown effectiveness.
Pharmaceutical spending: The Commonwealth should act to reduce drug spending growth. Specific areas of focus should include authorizing the Executive Office of Health and Human Services to establish a process that allows for a rigorous review of certain high-cost drugs, increasing the ability of MassHealth to negotiate directly with drug manufacturers for additional supplemental rebates and outcomes-based contracts, and increasing public transparency and public oversight for pharmaceutical manufacturers, medical device companies, and pharmacy benefit managers.
As a leader of the Massachusetts Employer Health Coalition, AIM is working with employers, employees, doctors, hospitals, and health insurers to reduce inappropriate use of emergency departments by 20 percent in two years. State officials estimate that a significant number of ED visits are potentially avoidable, a pattern that costs $300-$350 million annually for commercially insured members. Please check out our website for resources and information.
Associated Industries of Massachusetts and its 4,000 member companies today called upon the Legislature and Governor Charlie Baker to end to the two-year assessment imposed on employers last year to close a financial gap at the state’s MassHealth insurance program for low-income residents.
AIM believes the assessment is no longer necessary because employers last year paid tens of millions of dollars more than anticipated under the levy. Businesses are on track to contribute some $519 million by the time the assessment sunsets at the end of this year instead of the $400 million envisioned under the 2017 legislation.
At the same time, enrollment in MassHealth has fallen as the Baker Administration has initiated steps to ensure that only people eligible for benefits receive them. And state tax collections have exceeded targets over the past several months, putting the state on firmer financial footing.
“The conditions that led to the imposition of the surcharge no longer exist. Employers who have paid hundreds of millions of dollars in assessments believe it is fair to look at ending the surcharge in year two,” said John Regan, Executive Vice President of Government Affairs at AIM.
The Legislature passed the assessment in July 2017 minus a set of structural reforms proposed by Governor Baker to place the MassHealth/Medicaid program on a firm financial footing. The assessment fell most heavily upon companies in which employees elect to use MassHealth rather than the employer-sponsored health plan.
An existing assessment called the employer medical assistance contribution (EMAC) increased from $51 to $77 per employee. Employers also were required to pay up to $750 for each worker who receives public health benefits.
Employers may request a waiver from the fees if they prove a hardship. Of 246 such waiver requests, administration officials said they have allowed 99.
Governor Baker originally proposed a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents did not take the company’s offer of health insurance, and that did not make a minimum contribution of $4,950 annual contribution for each full-time worker. That proposal encountered significant opposition from the business community.
AIM member employers are proud to lead the nation in providing health care coverage to their employees. Sixty-five percent of Bay State companies offer health insurance coverage to their workers, compared with 56 percent of employers nationwide. A full 100 percent of Massachusetts employers with 200 or more employees offer coverage.
Employers stand ready to work with policymakers to make long-term structural reforms to both the MassHealth program and the commercial insurance markets to make the financing of health care for Massachusetts residents sustainable.
“Eleven years ago, employers joined with doctors, hospitals, patient advocates and lawmakers to forge a health-reform law that required all parties to share the responsibility for improving access to health care. The employer community calls for that same sense of shared responsibility now to solve the MassHealth shortfall,” Regan said.
Please contact Katie Holahan, Vice President of Government Affairs at AIM, firstname.lastname@example.org, for updates on this issue.
The rising cost of providing health insurance to employees remains the most pressing issue facing Massachusetts employers, a new AIM survey shows.
Three-quarters of the employers who participated in the association’s biennial Issues Survey from September to November identified the cost of health care as one of their three policy priorities. Other major challenges include work-force availability (64 percent), regulatory issues (53 percent) and the new paid family and medical leave law (51 percent).
AIM conducts the survey to solicit employer opinions on its policy agenda for the upcoming two-year session of the Massachusetts Legislature.
“AIM members understand the value of providing good health insurance to their employees, but employers are telling us clearly that they need relief from the relentless cost increases generated by the health-care system,” said Katie Holahan, Vice President of Government Affairs at AIM.
“AIM looks forward to addressing the health-cost issue on multiple fronts, from working with industry partners on health-plan design to resolving the employer MassHealth assessment to leading an employer effort to reduce unnecessary use of emergency rooms.”
One hundred sixty-eight employers participated in the AIM survey. The top 10 issues were:
- The cost of health care – 74 percent
- The availability of work force – 64 percent
- Regulatory issues (including compliance) – 53 percent
- Paid family and medical leave – 50 percent
- State and local taxes – 42 percent
- Minimum wage & the cost of electricity (tie) – 28 percent
- Transportation & federal taxes (tie) – 21 percent
- Trade issues – 15 percent
- Education – 12 percent
- Housing – 2 percent
Several employers expressed concern about the cumulative burden of government-imposed expenses – including the $200 million MassHealth assessment, unemployment insurance and minimum-wage increases – on their ability to grow and create jobs.
Health-insurance costs have been a dominant worry for Massachusetts employers for decades.
The Massachusetts Center for Health Information and Analysis (CHIA) reported in September that health care-spending in the commonwealth grew 1.6 percent from 2016 to 2017, with costs totaling $61.1 billion, or about $8,900 per resident.
While 2017 was the second consecutive year that overall growth came in below the 3.6 percent benchmark set by the Health Policy Commission, small-business premiums rose on average 6.9 percent. Deductibles, co-pays, co-insurance and other out-of-pocket expenses were up 5.7 percent.
Contact John Regan at email@example.com.
The Massachusetts Legislature ended its 2017-2018 formal session last night by mandating increased use of clean energy, establishing limits on the use of non-compete agreements and curbing the practice of “patent trolling.”
Lawmakers meanwhile were unable to reach agreement on a massive health-care bill that had generated concern among employers because it leveled assessments on medical providers and insurers that would eventually be passed on to consumers. The bill also contained no reform of the MassHealth program even as employers contribute $200 million per year to close a budget gap in the health-insurance program for low-income people.
Beacon Hill lawmakers crossed the finish line early this morning after a frenetic day that saw passage of bills covering everything from economic development to opioid care.
Governor Charlie Baker now has 10 days to review all the legislation. AIM will consult with member employers on the issues before recommending that the governor sign or veto each measure.
The new energy law authorizes an additional procurement of offshore wind power, increases the renewable portfolio standard that governs the amount of clean energy utilities must purchase, and establishes an energy storage target.
The compromise calls for the renewable portfolio standard to increase by one percent until the end of 2019, then by two percent each year until the end of 2029. It would then set the state on a track of one-percent increases each year thereafter.
Associated Industries of Massachusetts had supported a measured approach that would neither harm ratepayers nor elbow out other zero-carbon generation such as hydro-electric power. AIM supports the final bill.
“H.4857 An Act to Advance Clean Energy constructively builds upon the success of last year’s omnibus energy legislation,” said Robert Rio, Senior Vice President of Government Affairs at AIM.
“By following this measured approach, Massachusetts avoids disrupting the energy sector by making significant changes to programs that are themselves in the middle of being finalized. AIM feared that course would have delayed our effectiveness in meeting our greenhouse gas reduction goals.
“The measure will continue our aggressive transition from fossil fuels to a zero-carbon future while at the same time recognizing the importance of cost on Massachusetts ratepayers.”
(Contact Rio at firstname.lastname@example.org or 617.262.1180 to learn more.)
The law governing use of non-competes, included in an economic development bill, mirrors a compromise that AIM and other business groups reached two years ago with House Speaker Robert DeLeo. The measure limits non-competes to one year and gives employees the opportunity to consult a lawyer when signing a non-compete but does not require companies that compensate employees at the time they sign non-competes to pay them again during the restricted period.
“AIM has fought relentlessly for more than 11 years on behalf the vast majority of Massachusetts employers who wish to preserve the use of non-competes to protect intellectual property. The new bill accomplishes that goal and reflects the productive compromise brokered two years ago by the speaker,” said Brad MacDougall, Vice President of Government Affairs.
The economic development bill also contains a provision to limit the practice of patent trolling, in which third parties demand financial settlements for alleged infringement on patents they do not even own. AIM maintains concerns about the language of the provision because some employers may be unable to engage in legitimate protection of their intellectual property amid an avalanche of state litigation.
“The language of the bill is materially different from the compromise language previously approved by the Joint Committee on Consumer Protection and Professional Licensure,” MacDougall said.
“This is an important and legally complex issue, one that should be addressed by federal law. However, given Congress’ failure to act, if Massachusetts is to establish a policy, we need to get right for our AIM members who are victims of patent trolls and patent holders.”
The demise of the health-care bill turned on differing approaches by the House and Senate to capitalizing community hospitals.
House Majority Leader Ronald Mariano told the State House News Service early this morning, "We were just too far apart philosophically to a come to a resolution that fit our agenda."
The Quincy Democrat said the House was focused on trying to find a way to financially stabilize community hospitals in the short-term with assessments on insurers and large hospitals, while he said the Senate "wanted a market driven approach." "We just thought we couldn't wait," Mariano said.
Katie Holahan, Vice President of Government Affairs at AIM, said, the lack of agreement on health care reflects the enormous complexity of the issue. She said AIM and its employer-members will continue to work with the Legislature to find ways to moderate the cost that companies face in providing health coverage for employees.
“While final action was not taken on major health-care legislation, we remain gravely concerned that – without long-term reform to MassHealth and the commercial market – Massachusetts’ health-care costs will continue to increase unchecked. Until reform is achieved, no relief is in sight for employers and their workers seeking to access care at a reasonable cost,” Holahan said.
The conclusion of formal sessions on July 31 of even-numbered years generally means the end of the line for controversial bills. Lawmakers will meet for the remainder of 2018 in informal sessions, when a single lawmaker may stop any measure with an objection.
(Contact Holahan at email@example.com or 617.262.1180 for more information.)
Massachusetts should retain its 3.1 percent health-care cost growth benchmark because employers continue to struggle to provide quality health insurance coverage to their workers, AIM told a state panel today.
The state’s largest employer association told the Massachusetts Health Policy Commission that the current benchmark is necessary to moderate health-care costs that remain well above national averages. The Massachusetts Legislature established the health-cost benchmark as part of a 2012 health-care reform law.
The benchmark was 3.6 percent from 2012 until 2017, when it was lowered to 3.1 percent. AIM is recommending that the Commission retain the 3.1 percent mark for 2019.
“As we continue to track trends in health-care cost and utilization, the cost-growth benchmark has become a critical component for understanding year-over-year changes in health-care spending,” said Richard C. Lord, President and Chief Executive Officer of AIM.
“More than 10 years after the implementation of Massachusetts’ universal health care law, employers, consumers and the public sector continue to struggle with escalating costs of comprehensive health care.”
Massachusetts doctors and hospitals have a mixed record of meeting the heath-cost benchmark. Total Health Care Expenditures (THCE) grew by 2.3 percent from 2012 to 2013; 4.2 percent from 2013 to 2014; by 4.1 percent from 2014 to 2015; and by 2.8 percent from 2015 to 2016.
Lord told the Health Policy Commission that consumer behavior plays a large role in accelerating health-care costs, especially the tendency of patients to use of high-cost settings to receive care. According to estimates provided by the Commission, reducing just some of these factors by 10 percent could save tens of millions of dollars in unnecessary health-care spending.
The hospital outpatient utilization rate in Massachusetts is 50 percent higher than the national average. The rate of emergency room visits and inpatient discharges are 10 percent and 8 percent higher than the national average, respectively. And post-acute care discharges in the Bay State are 27 percent higher than the national average.
“And as premium and utilization costs continue to grow, employers have fewer options and less flexibility to keep year-over-year increases in check, raising important concerns about their ability to offer comprehensive insurance to their employees. Without comprehensive insurance, employees have less ready access to the type of coordinated and preventative care that leads to long-term health and productivity,” Lord testified.
“As an advocate for employers in the commonwealth, we believe that the appropriate role of government in controlling health insurance costs should be to establish reasonable health care spending targets, like the 3.1 percent benchmark, instead of proscribing regulatory solutions. The market should be given the chance to correct itself, and the commonwealth’s function should continue to be the monitoring of the industry’s progress in achieving this goal.”
The unsustainable cost increases are occurring in an industry where experts agree that at least a third of all care is unnecessary – delivered in the wrong setting; marked by a lack of coordination; provided with an inadequate emphasis on prevention; harmed by medical errors; burdened with rules and fraud; or just plain excessive.
Editor's note - TechSpring at Baystate Health will receive an AIM Next Century award at the association's Western Massachusetts employer celebration on September 28 from 4:30-6:30 pm at the Wood Museum of Springfield History. TechSpring, a health-care technology innovation center launched in 2014 by the regional medical services company Baystate Health, provides technology companies access to a live health system to test and validate digital-health solutions. Here is one example:
The Massachusetts Health Policy Commission voted unanimously today to lower the state’s objective for the growth of health-care expenditures from 3.6 percent to 3.1 percent beginning in 2018.
The vote marks a significant milestone for employers and consumers struggling with the soaring cost of health insurance. AIM President and Chief Executive Officer Richard C. Lord, who represents employers on the Health Policy Commission, has been a vocal supporter of lowering the benchmark and voted in favor of the 3.1 percent level.
“Today’s vote represents a concrete, measurable step toward moderating the type of premium increases that give employers a knot in their stomachs when they look at their insurance renewals,” Lord said.
“The action will ultimately mean more than all the sound and fury over national health reform in Washington."
The spending growth benchmark, established as part of the health-cost control law of 2012, is a critical component for understanding year-over-year increases in health-care spending. AIM has always favored an aggressive goal – the organization joined with the Greater Boston Interfaith Organization in 2012 to support setting the health-care cost growth benchmark at two percentage points below the growth in the state’s economy.
The association ultimately supported the establishment of a 3.6 percent benchmark because it recognized the vital importance of creating a standard to measure cost-containment efforts.
But Massachusetts has not yet seen sufficient progress. The commonwealth has exceeded the 3.6 percent benchmark in two of the past three measurement periods. Total Health Care Expenditures (THCE) grew by 4.2 percent from 2013 to 2014, and by 4.1 percent from 2014 to 2015.
“These unsustainable cost increases are occurring in an industry where experts agree that at least a third of all care is unnecessary – delivered in the wrong setting; marked by a lack of coordination; provided with an inadequate emphasis on prevention; harmed by medical errors; burdened with rules and fraud; or just plain excessive,” Lord said.
AIM is also addressing the health cost issue by supporting new research conducted by the Health Policy Commission suggesting that Massachusetts could reduce total health-care expenditures anywhere from $279 million per year to $794 million per year, or 0.5 to 1.3 percent, by making seven improvements to the health-care system.
- Shift community appropriate care to community hospitals – Reduce by 5-10 percent the number of cases treated at teaching hospitals that would be more appropriately treated at community hospitals. Savings: $43 million to $86 million.
- Reduce hospital readmissions – Cut the 2015 hospital readmission rate from 15.8 percent (78,000 readmissions) to a range of 15 to 13 percent. Savings: $61 million to $245 million.
- Reduce avoidable emergency room visits – More than 900,000 emergency room visits during 2015 were considered avoidable. Shift 5-10 percent of those avoidable visits to lower-cost settings. Savings: $12 million to $24 million.
- Reduce use of institutional post-acute care – Redirect 5-21 percent of the patients who currently leave hospitals to go to institutional rehabilitation facilities into home care. Savings: $46.6 million to $186 million.
- Provide incentives for consumers to choose high-value primary care providers.
- Increase the use of alternative payment methods -The commonwealth wants to increase the percentage of HMO participants covered by alternative payment methods from 58.5 percent in 2015 to 80 percent this year. Savings: $23 million to $68 million.
- Reduce the growth of prescription-drug spending – Cut the growth-rate of spending on prescriptions from 5.0 percent in 2016 to 3.6 percent to 4.3 percent. Savings: $57 million to $113 million.
The Massachusetts Health Policy Commission this week released its 2015 Cost Trends Report examining the cost of health care and health insurance in the commonwealth. Per-person spending on health care grew at less than the 3.6 percent overall economic growth rate, though overall spending grew at 4.8 percent. The bottom line is that health care spending continues to divert precious resources from employers, families and state government.
Graphics are courtesy of the Health Policy Commission.