Annual Report on the Performance of the Massachusetts Health Care System: 2016


The 2016 Annual Report on the Performance of the Massachusetts Health Care System includes a final calculation of the Commonwealth’s 2014 Total Health Care Expenditures (THCE) and an initial calculation of 2015 THCE. THCE is a measure of total statewide health care spending in the Commonwealth.

The report also includes information from public and private sources related to specific health care expenditures for Massachusetts residents, quality of care in the Commonwealth compared to national performance, enrollment and coverage trends, premiums and member cost-sharing, and payer use of funds.

This report informed the Health Policy Commission’s 2016 Health Care Cost Trends Hearing, which took place on October 17 and 18, 2016.

Key Findings

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  • 2015 initial THCE was $57.4 billion, or $8,441 per capita, representing a 4.1% increase from 2014 and exceeding the health care cost growth benchmark by 0.5 percentage points.

  • PMPM spending for commercial full-claim members grew 2.7%.  MassHealth Direct PMPM declined 3.1%, as enrollment outpaced medical spending. Traditional Medicare spending rose 2.0% PBPY.

  • After several years of increases, the proportion of commercial members whose care was paid for using alternative payment methods declined by two percentage points in 2015 to 35.1%.

  • Pharmacy spending continues to grow at a substantial rate (10.2% in 2015, following 13.5% in 2014). This spending growth accounts for one-third of the overall growth in THCE.

  • Individual enrollment more than doubled to 170,000 enrollees as subsidized and unsubsidized coverage became available through the Health Connector.

  • One in five Massachusetts commercial members (21%) were enrolled in a high deductible health plan. Membership increased by 14% to nearly one million members.

  • Cost-sharing among private commercial members continued to increase faster inflation and wage growth. Members continue to bear a greater share of health care costs.

  • The quality of Massachusetts providers was generally at or above national benchmarks, but there was performance variation across providers.

Note: After the September 2016 publication of this report, Harvard Pilgrim identified a material correction to its 2015 total medical expense (TME) data submission. CHIA incorporated this corrected data into the report, revising the results of 2015 Total Health Care Expenditures, 2015 commercial TME, and accompanying service category TME trends. Initial growth in THCE was originally calculated as 3.9%. This figure has been revised to 4.1%. CHIA would like to thank Harvard Pilgrim for identifying the submission error and bringing it to our attention.  See correspondence from Harvard Pilgrim.

Briefs on related topics will be published in the fall and early winter as part of the 2016 Performance of the Massachusetts Health Care System Briefing Series.

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