By Bethany Romano, MBA’17
It is no exaggeration to say that health care in the U.S. is expensive: in 2016 it was estimated to account for nearly 18 percent of GDP, and the costs rise every year. As a leading state in the healthcare industry, Massachusetts is keenly attuned to these trends and actively working to control cost growth.
In 2012, Massachusetts approved the Health Care Cost Containment Law, a landmark bill also known as Chapter 224. The goal of the legislation—the first of its kind in the nation—was to slow the growth of health care spending while also improving quality and access to health care for residents. But how do we know if Chapter 224 is effective?
Heller School senior research associate Cynthia Tschampl, PhD’15, joined fellow alumnus Humberto Reynoso-Vallejo, PhD’04, and a team of researchers to evaluate the law on behalf of the Massachusetts State Auditor, Suzanne Bump. The team published an initial report in June 2017, and an update in July 2018. Their findings paint an in-depth portrait of the health care and prevention landscapes in Massachusetts in recent years, with many successes and some significant ongoing challenges.
The following Q&A has been edited for clarity and length.
So, we know the purpose of Chapter 224 was to control health care spending while improving access and quality. How is the legislation structured to achieve that goal?
The law created numerous mechanisms for pursuing this goal. For example, it set benchmarks (or “ceilings”) for growth in total health care expenditures and designated new agencies to monitor health care cost growth and market dynamics. Chapter 224 also built incentives to encourage MassHealth and other payers, such as insurance companies, to adopt alternative payment models, which reward doctors for providing high quality, cost-efficient care.
Chapter 224 includes provisions for increasing price transparency, since prices are a huge cost driver for the health care sector. Lastly, the law includes funding for wellness and prevention programs, including work-place wellness initiatives; and expands the roles of nurse practitioners and physician assistants. You can see other provisions of the law summarized here.
Given that the legislation is trying to do so much, what kinds of metrics did you use to evaluate its effectiveness?
In general, we looked at the costs of care—including insurance premiums, out-of-pocket costs, and costs borne by the Commonwealth—and the prevalence of various health conditions, from 2011-2015. This means we looked at data around the health of vulnerable patient populations, access and quality of care, changes to the health care workforce, and public health issues such as the prevalence of preventable health conditions and racial/ethnic health disparities.
We also ran a brief online survey, and conducted in-depth, semi-structured interviews with key stakeholders. Excerpts from those interviews appear as quotations throughout the 2017 report. You can read some initial findings from the first round of interviews here.
Is the law effective, and how does that translate to its impact on residents?
In short, we really need more time and better data to determine the full impact of Chapter 224. In our work, we were able to see that the annual growth of health care spending did slow down from 2003 to 2013, but there is no way for us to know whether that was due to Chapter 224-related initiatives or other external factors, such as the Great Recession.
Most likely, Chapter 224 contributed to cost containment, but we’re not sure how much. Massachusetts missed the cost growth benchmark set by Chapter 224 in 2014 and 2015. Key contributors to why we missed the benchmark are prescription drug spending, unwarranted price variation, waste, and provider consolidation.
It’s also important to note that families and individuals experienced larger increases in health care spending than insurance companies, and that we observed numerous disparities, especially for low income households, African-Americans, and Latinos.
What did this year's updated report reveal?
The disparities we had observed between racial/ethnic groups and between people with private and public insurance persisted, and in some cases got worse. There were also indicators we are losing ground in the population health sphere.
Unfortunately, due to data availability, we weren’t able to update many of the measures. On the other hand, the workforce chapter got an in-depth update. Those findings underscored the urgent need for increasing the direct care workforce to support our aging population, and for improving financing for long-term services and supports.
What's next for this line of research? Any other key takeaways?
Given my other work, one thing I am thinking about is the recent increase in various infectious diseases. For example, we saw a 10.5 percent increase in tuberculosis in 2017, record hepatitis C in 2014, and record gonorrhea infections in 2013. One of my personal key takeaways is we must not stop investing in population health while spending a lot of time and attention focused on our medical costs. After all, most of the increase in human lifespan we’ve achieved is due to advances in public health, rather than fancy new machines or medical interventions.
This evaluation project, however, is officially over. The Massachusetts state legislature is considering new health care cost containment measures. It would be great to incorporate not just evaluation requirements (as with Chapter 224 in 2012), but also investments in data collection and quality. That way, we will be better equipped to learn which policies and interventions make the biggest difference in our health and health care costs.