Bad news from this week’s MA DHCFP Report. While total costs reflect changes in volume, service mix and unit prices, the primary driver in 2009 appears to be unit prices, especially in private insurance:
Key Findings: Private payer health spending in Massachusetts outpaced national health care spending and spending by Medicare and MassHealth
• Spending per privately insured member grew 6 percent from 2007 to 2008 and another 10 percent from 2008 to 2009. This rate of growth was substantially higher than the increase in national personal health care expenditures per capita from 2008 to 2009….
• Spending by private payers grew faster than spending by public payers… Faster growth in spending by private payers was largely the result of increasing prices
• Rising prices played a significant role in increasing private spending for inpatient and outpatient hospital services, as well as physician and other professional services…
• Private spending for drugs was largely driven by price increases in non-generic drugs…
• Increased private spending for imaging was driven by higher prices per service.
I predict some will claim this proves RomneyCare was mistaken. The report is best understood as additional evidence of provider market power in Massachusetts. We should be talking about how to address this market competition problem. (h/t to WBUR’s CommonHealth blog)