The Massachusetts Medical Society (MMS), representing over 24,000 physicians and trainees, provided comments to the Health Policy Commission (HPC) regarding the state’s health care cost growth benchmark for 2026. [Source]
Key Concerns and Data Context
- High Cost Growth: The 2025 Annual Report showed an 8.6% per capita increase in Total Health Care Expenditure (THCE) for 2023, driven largely by pharmacy spending and new MassHealth supplemental payments.
- Contextual Factors: This increase must be understood in light of lingering COVID-19 impacts, MassHealth eligibility redeterminations, new incentive programs, and provider closures.
- Greatest Cost Driver: Pharmacy spending continues to be identified as the biggest driver of cost growth, and the MMS supports recent legislative action to improve prescription drug affordability and increase oversight of pharmaceutical benefit managers (PBMs).
Recommended Changes to the Benchmark Approach
The MMS advocates for a more flexible and comprehensive approach to setting the cost growth benchmark:
- Longitudinal Evaluation: The current year-over-year assessment is considered insufficient. MMS recommends a longitudinal approach (over 2 or 3 years, as previously debated by the Legislature) to better capture long-term health care trends and account for market volatility.
- Incorporating Economic Factors: The current rigid, retrospective formula does not adequately incorporate real-time financial challenges. The MMS urges adding an annual adjustment factor to consider economic and market realities like labor costs, inflation, medical inflation, and the fiscal impact of evolving federal policies.
- Nuance for Smaller Entities: HPC should use its discretion to apply a nuanced analysis for smaller, less-resourced entities, especially those with high public payer panels, and not penalize them for making necessary, equity-driven investments that may exceed the benchmark.
Focus Areas for Investment and Cost Reduction
- Primary Care Crisis: The MMS highlights the declining share of primary care spending and a primary care shortage, citing patient difficulty accessing care. They stress the critical need to increase investment and reform payment for primary care to improve outcomes and ultimately reduce overall spending.
- Administrative Burden and Waste: The Society strongly supports HPC’s prioritization of reducing administrative burdens, particularly the current prior authorization process. This system is deemed a major impediment to quality care, an unnecessary cost driver, and a contributor to alarming levels of physician burnout.
- Physician Spending: Physician expenses have experienced only a modest increase and remain cost-effective, well below the overall spending growth benchmark.
Conclusion
The MMS urges the HPC to utilize its discretion to recommend an adjustment to the 2026 benchmark that considers the current economic challenges and the evolving federal landscape, ensuring the formula advances the shared goal of an accessible, affordable, and high-value health care system for all patients in Massachusetts.
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