Health care costs in Massachusetts surged 4.8 percent in '14

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BOSTON (AP) — The cost of health care soared nearly 5 percent in Massachusetts last year despite efforts to hold down expenditures, according to a state report released Wednesday.

The Center for Health Information and Analysis, an independent agency, said health care expenditures grew in 2014 at double the rate of 2013 and far higher than the inflation rate.

The 4.8 percent increase was more than anticipated, exceeding the 3.6 percent annual benchmark set under the state's 2012 health care cost containment law.

According to a preliminary estimate by the center, $54 billion was spent on health care in Massachusetts last year, or an average of $8,010 per person.

The increase "reflected faster growth than projected national health care expenditures per capita, state inflation, and the Massachusetts economy," the agency said in an executive summary to the report.

Costs were driven in large part by a surge in the number of people enrolled in the state's Medicaid program, known as MassHealth, which saw a spending increase of 19 percent.

The increase was attributed to an expansion of Medicaid eligibility under the federal Affordable Care Act, as well as the breakdown of Massachusetts' health connector website, which forced the state to place hundreds of thousands of residents into temporary Medicaid coverage.

The report noted that Medicaid enrollment dropped in the first three months of 2015 after the state launched a rebuilt health insurance exchange and many who had been in temporary Medicaid shifted back to private-sector plans.

Health care spending had slowed to an increase of 2.4 percent, or $7,641 per capita, in 2013.

Senate President Stan Rosenberg called the report "troubling" and called on the state to adopt a bulk purchasing program for pharmaceuticals to reverse a 13 percent increase in drug costs.

"Other states have been successful in bringing down drug costs through bulk purchasing, and Massachusetts is leaving money on the table by not doing so," said Rosenberg, an Amherst Democrat.

The report cited a gradual shift away from HMO membership and toward self-insurance coverage, and it said many businesses were designing alternative benefit plans that shifted more costs to employees.

The overall quality of care in Massachusetts, meanwhile, remained at or above the national average.

"However, there remain opportunities to improve service quality and patient outcomes, and there is variation in performance across providers, across types of measures, and across patient populations," the authors of the report wrote.

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