state of healthcare in massachusetts

I recently attended “The Annual State of the State Healthcare Leadership Forum” sponsored by the Massachusetts Medical Society.  Here are some of my quick takeaways:

  1. Blown budgets, no consequences. In 2015, the annual growth in healthcare expenditures in Massachusetts was at least 4.1%, exceeding the self-imposed state target of 3.6%.  There do not appear to be any real consequences to insurers or healthcare organizations for blowing through the ceiling. This suggests to me that even though the state has good intentions around controlling spending, it has not been able to really accomplish that.  This is not surprising given the state’s limited powers over physician and hospital utilization behavior or healthcare pricing.
  1. Average per person costs: $8,441. The total healthcare spend in 2015 was $57.4 billion, or $8,441 per person in Mass. This is a lot of money.  Of course, that spending skews towards much higher amounts for older and sicker patients, and much lower amounts for younger, healthier patients.  But in the aggregate, that $8,441 is the ballpark amount coming out of everyone’s paycheck to cover the cost of healthcare.  In my opinion, this is far too high a number, and we need to collectively work towards both improving the coordination and quality of care, while at the same time reducing unnecessary medical utilization – and cost.
  1. No port in the storm. Commercial expenditures rose 5.3%, MassHealth (Medicaid) rose 4.6% and Medicare rose 5.3%.  The bottom line for me from those statistics is that there is no port in the storm – costs continue to rise in every sector of the healthcare market.
  1. Prescription drug costs continue to rise uncontrollably. Prescription drug costs were $8.1 billion, or 14% of total spend.  This represents an increase of $700 million over the prior year.  This is old news by now. The cost of drugs continues to rise faster than any segment of healthcare, and no one has proposed a workable solution.  Perhaps a new administration in Washington, D.C. will be able to take a fresh look at controlling drug prices, as is accomplished in most Western nations.
  1. One in four Massachusetts residents is covered by Medicaid. MassHealth — the name for the Massachusetts Medicaid program — enrollment was up 12.9%, and now accounts for a staggering 40% of the entire Massachusetts state budget.  MassHealth relies on both state and Federal funding. One out of every four people in Massachusetts uses MassHealth for insurance.  This is surprising to many people, and reflects the enormous social and economic challenges faced by many families.  You may know that Massachusetts is mandated to begin a transition of MassHealth programs to a form of global payment that will cause a lot of disruption.  Hopefully – by using a foundation of strong information technology – health care organizations will begin to get on top of improving quality and decreasing unnecessary utilization.

Massachusetts, like all states, faces ongoing challenges with providing cost-effective health care to all its residents.  In order for any state to succeed with providing care to a complex Medicaid population, a foundation of indelible information technology is required.  Only once that IT platform is established can healthcare leaders and providers begin to make the difficult changes required for successful population health.

Dr. Rich Parker - Arcadia's Chief Medical Officer

Dr. Richard Parker

Dr. Parker serves as chief medical officer for Arcadia with overall responsibility for the design and implementation of clinical strategies, input into the roadmap and development of Arcadia’s technology and service programs, thought leadership in support of providers transitioning to value-based care, and strategic advisory work for physician leaders at Arcadia’s clients.

Previously, Dr. Parker was an internist with a 30-year history at Beth Israel Deaconess Medical Center. From 2001 until 2015, Dr. Parker served as the medical director and chief medical officer for the 2,200 doctor Beth Israel Deaconess Care Organization. He oversaw the physician network evolve from a fee-for-service payment system to a nationally recognized global payment pioneer Accountable Care Organization. Dr. Parker’s other areas of expertise include end of life care, medical malpractice, care of the mentally ill, electronic medical records, and population health management. Dr. Parker served as assistant professor of medicine at Harvard Medical School. Dr. Parker graduated from Harvard College in 1978, and the Dartmouth-Brown Program in Medicine in 1985.

Dr. Parker is an in-demand speaker to associations, companies, and academic institutions on the topics of population health management, electronic health records, value-based care, and evolutionary, medical and business impacts of stress.

November 1, 2016

More from Dr. Parker: How to talk with your physicians about value based care

Rich Parker, MD was the chief medical officer of 2,200 doctor Beth Israel Deaconess Care Organization, a nationally recognized ACO.  He  has firsthand experience communicating with a large physician network about the transition from fee-for-service to fee-for-value.   In a recent blog article, he shared some advice on how medical leaders can have those conversations with their physicians.

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