First IPAB cost control hearing, 2015

While the first IPAB hearings are years off (best case), we got a glimpse of the future today in Massachusetts. Monday was the first day of the MA health care cost hearings, with lots of politicians (good coverage by WBUR and HCFA). My Best Slides Award goes to Deborah Chollet, Ph.D., Mathematica Policy Research (download full ppt here). All you need to know is that Medicare and Medicaid fix prices but not volumes while private insurance can use managed care technology to constrain volume, but provider market power drives prices. The result in Massachusetts?

 

The Best Chart Award goes to Dianna K. Welch, F.S.A., M.A.A.A., Oliver Wyman Actuarial Consulting, Inc. (full ppt here), for showing how small group beneficiaries increasingly have more skin in the game (prior TIErades here), and yet the MLR for small groups hasn’t budged much.



Note the dramatic increase in small groups with low actuarial values and the decline of those with high values – costs are being rapidly shifted to beneficiaries. And now the MLR chart, which actually shows an increase in small group MLR in 2009. Cost shifting did not result in savvy shoppers.

 

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