October 12, 2017 | Rosemarie Day and Emily Eibl

2017 Massachusetts Healthcare Cost Trends Hearing Details



  • Focus on “whole person” care by strengthening primary care, behavioral health services and integration, programs to address social determinants of health, and team based coordinated care.

One of the areas that the Health Policy Commission highlighted as an area that need to be addressed in order to slow cost growth was hospital readmissions. The commission demonstrated that patients with behavioral health (BH) comorbidities had a readmission rate almost double the rate from patients without a BH diagnosis. This data reiterated the need for an increased focus on behavioral health.



  • Increase alternative payment models to incentivize investment in value based integrated care.

Many providers talked about how alternative payment models (APMs) allow them to make the necessary investments to create integrated value-based care systems. In global payment systems where providers are responsible for full risk and the total health of a patient, the providers are incentivized to invest in initiatives that reduce total medical expense. In order to achieve the desired savings in global arrangements, providers have to build the infrastructure to have more coordinated care and interact with patient’s entire spectrum of needs, including behavioral health and social determinants of health.

While these APMs are key to driving the transition from volume-based care to value-based care, the national insurers are actually decreasing APMs and increasing fee-for-service models (FFS). Many providers commented that it is very difficult to make the necessary investments and change how care is done in their practices when they have both patients with APM based insurance and FFS based insurance. Additionally, many APM have fee-for-service chassis, meaning that the APM is still rooted the FFS infrastructure, which hinder practices’ ability to achieve true transformation.

In order to cut costs while maintaining access and quality, all interests need to align on providing value based care that addresses patient needs by providing the appropriate care at the right time and right place. In order for value-based care to work, care needs to be centralized in primary care with coordination and integration across providers, and patients need to be holistically evaluated and served, including addressing behavioral health and social determinants of health needs. Panelists highlighted that addressing social determinants of health is about looking at patients on an individual level. Each patient’s needs must be identified and addressed in order to improve their outcomes.

  • Address provider price variation.

Many of the providers on various panels reiterated that provider price variation hurts high quality, lower paid providers who serve largely MassHealth and low-income populations. They argued that it is increasingly difficult for them to provide high quality care with such low payment rates. These providers also commented that the low rates hinder their ability to make the necessary investments to drive successful value based care initiatives.

Discussing solutions for the challenges associated with provider price variation was not part the hearings. However, earlier this year a special commission on provider price variation released a report with data on price variation, factors driving price variation, and policy recommendations. Additionally, at the hearing, Senate President Stanley Rosenberg said to expect a legislative package this fall that addresses the special commission’s findings and recommendations for provider price variation, in addition to other cost drivers.

  • Account for socio-economic factors in payment policies.


Dr. Maddox in her presentation, “National Perspective: Health Care Costs and Readmission” highlighted that many national payment incentive and penalty programs disproportionately penalize safety net providers. These penalties are unfairly harsh because the providers have greater challenges to overcome given that their patients have increased medical and social risks. Dr. Maddox emphasized that policy makers need to take unintended consequences into consideration when designing payment policies. She suggested that programs should account for social and medical risk in performance evaluation, provide risk adjustment, reward improvement, and consider targeted bonuses.


  • Improve financial incentives for consumers to reward people for choosing high quality care.

One of the goals discussed during the hearing was to have the appropriate care at an appropriate time and setting. This includes moving care from academic medical centers to community settings that provide high value services. In order to achieve these goals, patients need to be educated about the high value and quality of community based services. Among many consumers there is a misperception that the highest quality care is at the academic medical centers and any hospital based care should be received at those settings. In addition to education, some discussed the benefits of providing increased financial incentives to consumers that reward people for choosing high quality care, like greater differences in premiums and cost sharing.