‘We Were Close’ to Hitting Healthcare Spending Target, but Missed Again

Massachusetts healthcare costs increased by 3.9 percent in 2015.

On the back of increasingly expensive prescription drugs, Massachusetts healthcare costs rose by 3.9 percent last year, reaching $57.2 billion in all and $8,424 per resident. Those on private insurance plans also saw cost sharing, including co-pays and deductibles, rise by an average of 4.4 percent between 2014 and 2015.

The statewide increase is down from 2014’s 4.8 percent growth rate, which was largely driven by the implementation of the Affordable Care Act, but it marks the second year running that the Commonwealth has exceeded the 3.6 percent growth benchmark established by a 2012 cost containment law. Ballooning pharmacy costs are largely to blame this time, accounting for a third of last year’s increase.

While the new report, compiled by the Center for Health Information and Analysis, points to the difficulties of capping healthcare spending, Massachusetts officials are choosing to remain optimistic.

“Generally, I think it is good news,” Health Policy Commission Chairman Stuart Altman said in a statement. “I think 3.9 effectively is at the benchmark. Given that we’re talking about a huge industry like health care, the difference between 3.65 and 3.9 really is in the margin of error.”

Lora Pellegrini, president and CEO of the Massachusetts Association of Health Plans, also spoke positively in the statement, noting that Massachusetts’ growth is below the projected national increase of 4.9 percent. “It’s telling me that having that cost benchmark in place is having some impact, although we clearly didn’t hit the target,” she said. “We were close.”

To actually hit the target, many experts say, would require stronger efforts to control drug pricing. In January, the Health Policy Commission released a set of recommendations for controlling expenditures, including one pushing for more transparent pricing models.

“I think that unfortunately, the price of drugs is unsustainable,” Pellegrini said in the statement, “and it’s going to really crush the health care system, unless we get a better handle on what’s driving that cost.”


Jamie Ducharme Jamie Ducharme, Health Editor at Boston Magazine jducharme@bostonmagazine.com


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