The Health Policy Commission (HPC) released its annual cost trends report last week, reiterating what the state reported last September – that total healthcare expenditures in Massachusetts grew by 2.8% in 2016, well below both the 3.6% growth benchmark the commonwealth had set and the national 3.5% growth rate.  2016 marked the seventh consecutive year that the commonwealth’s total healthcare spending growth was below the U.S. rate.

The highest percentage of total expenditures in the state was for physicians and other professions (26.8%); that sector saw spending growth of 3.1%.  The next largest component is hospital inpatient (21.1%), which experienced cost growth of just 2.2% in 2016.

The sector of the healthcare system with the largest cost growth was once again pharmaceuticals; pharmacy cost growth was 6.1% in 2016. The other part of the system that exceeded the benchmark was hospital outpatient costs, which grew 5.5%.

In its analysis of hospital outpatient costs, the HPC noted, “Growth in hospital outpatient spending does not by itself indicate that spending is unwarranted; for example, shifting higher-cost inpatient care to outpatient care could represent an improvement in efficiency.”  HPC noted that many surgical procedures that are minimally invasive and that employ better anesthesia have shifted from inpatient to outpatient settings, driving down more expensive inpatient costs while increasing outpatient volume.

While hospitals, physicians, insurers, state government, and employers stressing wellness programs among their workers are all working to drive down healthcare costs in Massachusetts, one massive, looming, unfunded expense threatens to erase the success to date.  The proposed statewide ballot question to impose one-size-fits-all ratios on hospitals is estimated to cost in excess of $830 million annually.  Last Wednesday, various healthcare interests warned the HPC of the impending budget-busting proposal.

Atrius Health is “deeply concerned” about the ratio ballot question, according to testimony submitted by Steven Strongwater, M.D., president and CEO of Atrius Health, representing more than 900 physicians serving approximately 720,000 patients in the commonwealth. “We do not believe the imposition of staffing ratios will have a material impact on patient safety … These initiatives could have a direct impact on the ability of all providers to meet the established benchmark,” he said.

MHA agreed in testimony delivered by V.P. of Government Advocacy Mike Sroczynski. He said that the ballot initiative proposed by the Massachusetts Nurses Association union, which represents less than 25% of the RNs in the state, “is in direct conflict with the tenets of Chapter 224, as it would significantly raise the cost of healthcare in the state with no existing scientific evidence to show that ratios offer any benefit to patient care.”  He added, “To comply with such a measure, hospitals would be forced to end service lines or other innovative investments and redirect funding to labor costs. Several community hospitals with already-low margins would be forced to close. RNs would be pulled from community health centers, long-term facilities and home care, causing staffing shortages for non-hospital providers that often care for the most at-risk patients in the commonwealth. Ultimately, consumers will also feel the cost of this initiative through higher co-pays and deductibles.”

John Erwin, the executive director of the Conference of Boston Teaching Hospitals, said the unfunded mandate of the ballot question would jeopardize “the viability of those hospitals with already razor thin operating margins. There are no scientific studies that indicate this mandate will improve the quality of care for patients in Massachusetts. Instead, this required spending would crowd out other areas of potential hospital investments aimed at increasing efficiency and improving access and patient safety.”

The Executive Office of Health and Human Services (EOHHS) announced last week that 52 acute care hospitals are eligible for $10.385 million through the Community Hospital Reinvestment Trust Fund (CHRTF). The hospitals must submit an attestation form to EOHHS by April 19 to be eligible to receive the funding.

CHRTF was established through Chapter 115 of the Acts of 2016, which required the Center for Health Information and Analysis (CHIA) to transfer to the trust fund $5 million in FY2017 and $10 million annually through FY2021. (An extra $385,000 is available in FY18 from leftover FY17 funding.) Hospitals are deemed eligible for trust fund payments through a CHIA-calculated formula that determined a hospital’s relative prices against a state median.

As a condition of receiving the payment, hospitals have to provide an attestation to EOHHS agreeing to an independent financial and operational audit, and to use the funding for improving or continuing healthcare services that benefit the uninsured, underinsured, and MassHealth populations.

Attend the 6th Annual Communication, Apology, and Resolution Forum hosted by the Massachusetts Alliance for Communication and Resolution following Medical Injury (MACRMI). It takes place on Tuesday, May 15, at the Massachusetts Medical Society, 860 Winter Street, Waltham, from 10 a.m. to 2:30 p.m.  Register online by April 7.

April is national healthcare decisions month – the time when individuals and families are encouraged to focus on the process you want your loved ones and caregivers to follow if you become seriously ill.

If you have a plan in place, it will ensure that your family will not be burdened with making tough decisions on your behalf if you become seriously ill and that your wishes will be carried out. Having a plan in place can also help prevent disputes between family members who may have differing ideas about the care you should, or should not, receive. And avoiding those disputes, which often occur in care settings, assists the caregivers at your bedside as well, who will be able to provide the care you wish without conflict.

The national healthcare community is focusing its “advance planning” efforts on the week of April 16 to 22.  To get started sooner, you can visit PatientCareLink; click on “Healthcare Planning Throughout Your Life” under the For Patients & Families tab, or “Serious Illness Care” under Improving Patient Care.

MHA’s 82nd Annual Meeting

Wednesday, June 6 through Friday, June 8

MHA’s annual meeting has always been a hallmark membership event.  This year, we’re shifting locations to the well-appointed, centrally located, and competitively priced Doubletree by Hilton Boston-North Shore in Danvers. One aspect of the meeting that will remain unchanged is MHA’s line-up of the most insightful speakers, contemporary topics, and thought-provoking discussions.  We’ll focus on the critical factors affecting healthcare today: disruption, leadership, population health, and opioids. We’ll also examine the shifting political landscape and its effect on our sector. The full agenda will be forthcoming but the headline speaker is Scott Stratten, whose keynote is entitled: The Age Of Disruption: Everything Has Changed and Nothing Is Different. As always, MHA will provide the best education (including pre-conference workshops), networking opportunities, and c-suite attendance that you have come to expect. And it will be inspiring and energizing to gather with your colleagues from around the commonwealth. Click here to register and to reserve a room at the special discounted rate.