March 24, 2022— Last week, the Center for Health Information and Analysis (CHIA) released its Annual Report on the Performance of the Massachusetts Health Care System for the year 2020. Like much of 2020, the findings in CHIA’s report were far from typical and showed many of the dramatic changes we all experienced during the first waves of the COVID-19 pandemic.
During the initial waves of COVID, many people stopped going to the doctor and even to the hospital, avoiding care from routine check-ups to non-emergency surgery. What CHIA’s report showed is that this ultimately resulted in an unprecedented drop in health care spending, well below the statewide cost growth benchmark of 3.1% that is set each year as a target to control spending. The growth rate didn’t just slow, it actually declined by 2.4% in 2020. That trend is not expected to last, however. Between 2018 and 2019, the state’s total health care spending increased by 4.1% and spending is expected to continue to bounce back with initial data already pointing in that direction.
Because people were using less health care services than they had in the past, the report also found that spending on inpatient and especially outpatient care at hospitals and physicians’ offices declined dramatically as well. The amount individuals and families spent on out-of-pocket costs like co-pays and deductibles also declined because so many people didn’t get care as they normally would, in an effort to stay home and stay safe. What is concerning, however, is the financial gains insurers held onto as a result of the decline in spending on health care. The amount of money insurance companies brought in through premiums but did not spend on medical care increased by more than 35%, even after accounting for rebates and credits paid back to consumers. We would have hoped to see that savings reflected in lower premiums in the following years, but so far premiums have only risen even faster for individuals and small businesses, at 8% in 2021 and 7% in 2022.
Another concerning trend from the report was the continued shift toward high-deductible health plans compared to other types of plans. That is an ominous sign that as people return to using health care services at normal rates, they will face higher cost barriers to doing so. In fact, a survey conducted in 2021 already found that more than half of Massachusetts residents faced an affordability burden such as forgoing care due to cost, with Black and Latinx residents facing more burdens than white residents, demonstrating the continued impact of health care prices on consumers’ household budgets and the enduring racial disparities in health care access. This data, combined with the results from CHIA’s 2020 report, highlight the need for legislators to establish a consumer benchmark to track the costs that individuals and families pay and to make sure they aren’t rising faster than overall costs, forcing families and businesses to shoulder more than their share of the burden.
The only costs that didn’t decrease in 2020 according to CHIA’s report were prescription drug costs, which continued to rise rapidly, as most people continued to take their medications during the pandemic. Prescription drug spending grew by 7.7% in 2020, more than twice the benchmark even after taking accounting for drug rebate discounts. Prescription drug costs remain a concern for many Massachusetts residents. Nearly 1 in 5 Massachusetts residents skipped a dose or could not refill their prescription this past year due to cost, and almost half of those surveyed said they were worried about affording their medication in the future. Legislation to tackle rising prescription drug costs is pending before the legislature this session, giving lawmakers the opportunity to address these concerns that only increased in urgency during the pandemic.
In general, CHIA’s annual report reflected the highly unusual year that 2020 represents, and policy decisions should not be made based on one year’s data alone. Yet the report’s findings on prescription drugs and the continuing shift toward high-deductible plans, in combination with consumer survey data and the expected increase in health care spending, confirm what we hear daily from callers on our HelpLine — that action is needed to make care more affordable for Massachusetts families and businesses.
Grace Jurkovich is a Policy & Project Coordinator at Health Care For All.
