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Policy: Budgets & Deficits

Health care spending in Massachusetts on the rise

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BOSTON (AP) — A new report Tuesday offered a mixed diagnosis on health care costs in Massachusetts, finding that while total spending continued to grow faster than inflation, the increase stayed well within parameters set by the state.

The Center for Health Information and Analysis, created by a 2012 law that was aimed at reining in health care costs, said expenditures totaled $50.5 billion in 2013, an increase of $1.5 billion, or 2.3 percent, above the previous year.

While exceeding the rate of inflation, which was 1.5 percent for the year, the increase was below a 3.6 percent benchmark established under the law. Insurance premiums paid by consumers averaged about the same as the previous year.

On a per resident basis, the total paid for health care was $7,550, the report said, with spending by government programs — including Medicaid and state-sponsored Commonwealth Care — accounting for 60 percent of the total.

"In 2013, the Massachusetts health care system performed favorably on a number of indicators," the report concluded. "Overall per capita growth ... was below the benchmark, commercial insurance premiums were essentially unchanged from 2012, and benefit levels and member cost-sharing held steady."

But in addition to pointing out that health care costs exceeded the rate of inflation, the study's authors noted that Massachusetts still has among the nation's highest costs and singled out the state's largest insurer and largest provider for closer monitoring.

Blue Cross Blue Shield of Massachusetts, the state's largest health plan with about 40 percent of the commercial market, was the only insurer to exceed the 3.6 percent benchmark, according to the report.

Blue Cross Blue Shield disputed the formula used in the report to calculate the reported 3.65 percent increase, pegging the actual growth in expenditures at 2.1 percent.

Partners HealthCare was the recipient of 28 percent of total hospital and physician payments based on 2011 numbers, far and away the largest of any provider network in the state, and its 2013 spending increases were among the largest in Massachusetts, the report found.

Rich Copp, a spokesman for Partners, noted the company experienced cost pressures in 2013 after actually lowering the cost of care for patients in the previous year.

Reversing the trend in health care costs is "difficult to measure in a one-year snapshot," said Copp.

The 2012 health care law established specific goals for limiting the future growth of health care costs and encouraged the creation of "accountable care organizations" that take a more coordinated approach to medicine.

The report was released in advance of a two-day hearing next month by the Health Policy Commission to examine 2014 trends in health care costs.

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