AG Maura Healey: Common ways of controlling health care costs are ineffective

BOSTON -- Spending on inpatient visits continues to rise at high-cost hospitals, even as it falls at lower-cost hospitals, according to a report released Thursday by Attorney General Maura Healey. And methods often touted as cost-saving measures -- enhancing consumer transparency and moving patients to health plans that pay for positive outcomes -- are ineffective.

“Massachusetts families bear incredibly high costs for health care,” Healey said in a statement. “We need real solutions to control escalating costs and cannot put the burden on patients.”

Healey published her report in advance of the Health Policy Commission’s annual cost trends hearing Tuesday and Wednesday. Healey, whose office represents health care consumers, will speak at the hearing.

Massachusetts policymakers have for years been working to control the state’s high health care costs. Last year, according to the Center for Health Information and Analysis, spending on health care in Massachusetts grew by 3.1%, a figure in line with goals set by the state. However, the same report found that individual consumers are paying more through premiums, co-pays and deductibles.

Healey’s report found that among large health care systems, a greater share of patient expenditures is going to the systems’ higher-priced hospitals, rather than lower-priced hospitals. In other words, health care systems generally are steering patients toward more expensive places to get care.

One method often discussed as a way to lower costs is providing consumers with information about how much money their health care costs, by requiring insurers to develop tools that let consumers compare prices at different providers. Healey found that few consumers actually use these tools. In 2017 and 2018, the number of searches of cost estimate tools per 100 members ranged from 2 to 6.6 a year. And few consumers try to hold insurers to the cost estimates they receive.

Even in the limited number of instances when insurers offer financial incentives to consumers who pick lower-cost settings, only a small percentage of consumers actually get those rewards.

The people most likely to use cost estimate tools are women and young adults, and individuals with high-deductible health plans, where consumers have to pay a lot of money out of pocket before their insurance kicks in. The most commonly searched services are imaging, women’s health and behavioral health.

Healey wrote that policymakers should not expect price transparency to significantly lower costs.

The state has also been making an effort to move insurers and patients away from a fee-for-service model to alternative payment methods, where an insurer pays a health care provider a sum of money to keep a patient healthy. Then the health care provider makes more money if the patient stays healthy with fewer services. The goal is to reduce unnecessary medical services.

But Healey’s report found that alternative payment methods are also not a silver bullet for controlling costs. Patients frequently move between insurance plans, so it becomes hard for insurers and doctors to track and share savings.

Healey also flagged problems with how the system assigns members to a provider in determining who gets paid for that patient. For example, an insurer may assign a primary care doctor responsibility for a patient who the doctor saw once and who is primarily seeing specialists.

The attorney general suggests that state policymakers review the incentives for health care providers to direct patients to lower-cost settings, and recognize and address the challenges of implementing alternative payment methods -- for example, by standardizing the way patients are assigned to physicians.

Healey will speak about her report at the cost trends hearing on Wednesday. Also speaking at the hearing will be Gov. Charlie Baker, House Speaker Robert DeLeo, D-Winthrop, and Senate President Karen Spilka, D-Ashland.

Baker plans to release his own health care proposal on Friday.

The hearing, held at Suffolk University Law School in Boston, will feature panels with a range of health care experts, including a number of hospital and insurance company chief executives. Topics will include confronting complexity in health care systems, pharmaceutical market trends and cost drivers, strengthening primary and behavioral health care and provider market trends.

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