Growth in state health care spending drops to lowest level in five years

DATE: September 12, 2018

Out-of-pocket costs, such as deductibles and co-pays, increased at a rate of 5.7 percent last year in Massachusetts.

The state made headway in controlling health care spending last year, according to a new report issued Wednesday.

Total spending in Massachusetts increased 1.6 percent in 2017 — the lowest level of growth in five years — even as costs remain a burden for many consumers.

The state spent $61.1 billion on health care last year, or $8,907 per person, according to a report from the Center for Health Information and Analysis, a state agency. That was within a state-mandated target for controlling costs.

The figures — which include spending Medicare, Medicaid, and private insurance spending — are a bright spot for a state with notably high health care costs. But they are preliminary and are likely to be revised in the future as more data become available.

The report also found that consumers are not necessarily feeling the moderation in health costs. Out-of-pocket costs, such as deductibles and co-pays, increased at a rate of 5.7 percent last year.

Stuart Altman, chairman of the state Health Policy Commission, which monitors health costs, said the report shows Massachusetts is leading the country in lower cost growth.

“Underneath the headline number, however, are some areas that require further examination,” Altman added in a statement. “While total health care spending growth is very low, there are concerning trends related to the affordability of care and coverage.”

A 2012 state law requires Massachusetts to contain the growth in medical spending to 3.6 percent a year. That target soon will become more strict, at 3.1 percent.

The new analysis shows that spending in the state Medicaid program, called MassHealth, dipped slightly as enrollment fell last year. In the commercial health insurance market, which includes people who get coverage through their employers, spending increased 3.1 percent.

Lora Pellegrini, president of the Massachusetts Association of Health Plans, which represents insurance companies, said the report shows “significant strides” in controlling the growth of health care spending.

“This is good news for employers and consumers, but today’s report also demonstrates that more work needs to be done to address health care cost drivers in our marketplace,” she said in a statement.

The report included a revision to the estimate for health spending growth in 2016. That figure was revised upward, from 2.8 percent to 3 percent.

- Priyanka Dayal McCluskey, Boston Globe Staff, September 12, 2018