February 2, 2023
Business Confidence Slips to Begin 2023
A strong performance by the Massachusetts economy during the fourth quarter of 2022 was not enough to stem…Read More
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Posted on December 12, 2022
By Vasundhra Sangar
The cost of providing affordable and accessible health care to employees has been a dominant concern of AIM members for decades. It is likely to remain so as the entire health system works to meet current realities, take stock of unprecedented shifts brought on by COVID-19, and prepare for what all of this could mean in the near and long-term for the future of care.
Even before the pandemic, Massachusetts employers sought to understand their role in ensuring that good medical care remained affordable and available to their employees. They did so recognizing that health care is itself as a major driver of the Massachusetts economy.
In 2018, for example, AIM helped to launch the Massachusetts Employer Health Coalition to stem the overuse of emergency departments (ED). The goal was to decrease ED usage by 20% by the year 2020 – thereby saving the system an estimated $100 million – through employee education, consistent ED data collection and reporting, health-care system collaboration, and policy advocacy for cost-containment mechanisms, including telehealth. The arrival of a global pandemic derailed those plans, and all but eliminated non-emergency ED usage because of facility closures and fear of exposure. ED usage in Massachusetts decreased by 50% in two months and remained below 20% average usage through the last quarter of the year.
As we approach 2023, these numbers are back on the rise and the Massachusetts health-care landscape remains almost unrecognizable.
On one hand, providers hospitals, and emergency departments are being stretched financially in the face of inflation; supply chain disruption; an influx of COVID, flu, and RSV patients seeking a limited number of intensive care beds – especially in pediatrics – and a depleted health-care workforce. According to data presented by the Massachusetts Health and Hospital Association (MHA) last month, nearly 19,000 acute-care hospital positions were vacant across practice areas including behavioral health, technicians, labratory personnel and clinical support staff.
The same report reflected a 56% vacancy rate for licensed practical nurses – one of the highest vacancy percentages reported in vital health-care positions. The workforce shortage can be linked to several factors including members of the Baby Boomer generation retiring earlier than planned, clinical staff burnout and exhaustion from the pandemic, and the availability of higher paying jobs untethered to the overall system. Travel nurses, for example, stand to make up to three times as much as on-staff nurse positions.
The shortage of workers is also driving up labor costs to what the MHA report calls an “unsustainable level, destabilizing the already fragile state of hospital financials.” Vacancy rates of any scale create additional delays in care delivery and reduced access in service. Patient backlogs translate into deferred or mismanaged care creating a ripple effect of increased strain on the entire healthcare delivery system.
Insurance carriers and several AIM member companies have noted the financial shift in their health-care costs as a result. Outgoing Blue Cross Blue Shield of Massachusetts CEO, Andrew Dreyfus recently expressed concern about the rising costs of care and what they would mean for employer premiums, estimating a double-digit rate increase for many in 2023.
As AIM continues to collect employer feedback on premium rates for the new year through the health-care cost survey, anecdotal evidence from several members, especially small businesses, points to premium increases between 17-20%.
Massachusetts employers outside of the health-care industry who are reporting these numbers are facing a workforce shortage of their own, not to mention similar concerns of labor and supply costs due to inflation and supply chain disruption. Businesses are finding it difficult to attract and retain talent, to remain profitable, or to expand business presence in Massachusetts at a time when it is increasingly easier to hire workers from anywhere in the country.
Surging health-insurance premiums may force many of these businesses, particularly those with fewer than 100 employees, to rethink their futures in the commonwealth. Clearly, this is the opposite of what we hope for when we envision a Massachusetts where residents can rely on job security and economic mobility, and where they would willingly choose to live, work, and raise their families.
The question before the state now is how can we make this happen: How do we ensure that Massachusetts employers can afford health insurance for their workers? How do we ensure that that those workers can afford access to high-quality care? And how do preserve Massachusetts’s status as a global center of health care and research?
Here’s the good news: The COVID-19 pandemic highlighted how interconnected Massachusetts healthcare system is and how far it can go when industry, employers and policymakers move forward together.
For example, the pandemic served as a catalyst for the use of telehealth, a development that required significant collaboration between policymakers and industry leaders.
The governor’s office initially released emergency orders allowing for medically necessary telehealth services to be provided at in-person rates with no patient cost-sharing, understanding the provisions would be revisited once the emergency was under control. By January 2021, Chapter 260 of the Acts of 2020 was on the books, confirming that telehealth visits would be reimbursed at the same rate as traditional in-person visits until the end of 2022 for primary care and chronic disease management, while allowing virtual behavioral health services to be reimbursed as in-person visits in perpetuity.
This final compromise required understanding on the part of policymakers, employers, and health care leaders alike to ensure the system could withstand the pandemic disruption and continue providing valuable care to residents at an affordable cost. Although final rate determinations for the continuation of telehealth are pending approval by the state Division of Insurance, many carriers have taken it upon themselves to extend parity coverage into 2023.
The solution to the current challenges in health care will demand a similar level of collaboration and understanding among both public and private-sector leaders working collectively towards the same goals of access and relative stability, especially as we look at the issue through the lens of diversity, equity and inclusion.
Recent Center for Health Information and Analysis data reported that Black and brown residents were 60% and 110% more likely, respectively, to rely on the emergency room for non-emergency care and were more likely to have had utilized the ED as a source of health care at least three times in the last year. What’s interesting is this data was compiled from 2015, 2017 and 2019 – before COVID-19.
Understanding how to make our health-care payment and delivery systems more efficient to increase access, affordability, health and economic mobility for all commonwealth constituents remains a priority for AIM employer members as we begin the new legislative session. AIM looks forward to being part of that discussion.