Supplement4:Commercialtotal Medicalexpenses

CENTERFORHEALTH INFORMATIONANDANALYSIS

ANNUALREPORTON THEPERFORMANCEOFTHEMASSACHUSETTSHEALTHCARESYSTEM

SUPPLEMENT4:COMMERCIALTOTAL MEDICALEXPENSES

CommercialTotalMedicalExpenses

CommercialTotalMedicalExpenses(TME)is onecomponentofTotalHealth

CareExpenditures(THCE).Itincludesexpendituresbycommercialpayers onbehalf offully-insuredandself-insuredmembers in Massachusetts. Theseexpendituresconsistofclaimsandnon-claims(suchasperformance paymentstohealthcareprovidersbycommercialpayers),aswell as

membercost-sharing(deductibles,co-payments,andco-insurance).1TMEis measuredonapermemberpermonth(PMPM)basis.

KeyFindings:

Overallcommercialhealthcare expendituresgrew to$18.4billionin2013,anincreaseof2.2%.

Total MedicalExpensespercommercially-insured memberpermonthgrewby1.7%to$430.

Commercialspendingforhospitaloutpatient servicesgrew3.8%,thehighestrateofgrowth amongallservicecategories.

BlueCrossBlueShieldofMassachusettshadthe

highestrate ofgrowth(3.65%)amongallpayersinhealth statusadjustedTotalMedicalExpenses,exceedingthe state’sspendinggrowthbenchmarkof3.6%.

TotalSpendingfor

CommerciallyInsuredMembers

Healthcareexpendituresforthe Commonwealth’scommercially-insured populationgrewfrom$18.1billionin2012to

$18.4billionin2013,a2.2%increase(Figure

4.1).TMEforcommercialpayersrepresents thelargestcomponentofcommercial expendituresincludedinTHCE.

4.1

Total Spending forCommercially Insured Members 2012 – 2013

Totalspendingincreasedby+3.5%forfull- claimmembers(forwhomthepayersareable tocollectandreportspendinginformation

foracomprehensivesetofbenefits).Forthe partial-claimmembers(forwhomthepayers areunabletocollectandreportspending informationforcarvedoutservicessuchas behavioralhealthandprescriptiondrugs),total spendingdecreasedbyanestimated1.2%.2

Expendituresforthecommercialpayersthat arenotrequiredtoreportTMEdatatoCHIA butarelicensedtoofferhealthinsurancein Massachusettswereestimated;theseestimated expendituresdeclinedby18.6%,from$17.7 millionin2012to$14.4millionin2013.34

Figure4.1:TotalSpendingfor

CommerciallyInsuredMembers

2012–2013

1TheprimarydatasourceforthiscategoryistheTotal MedicalExpense(TME)datareportedtoCHIAannuallybylargecommercialpayersthatarelicensedinMassachusetts.Pleasesee TechnicalAppendixforthelistofcommercialpayersannuallyreportingTMEdatatoCHIA.TME includesspendingforMassachusettsresidentsonly.

2Theestimatesforthepartialclaimsspendingwere developedforeachapplicablepayer’s partial-claimpopulationbaseduponitsfull-claimpopulation.

3Thesepayerscollectivelyrepresent lessthan1%ofcommercialmarketenrollment.

I.TotalMedical

ExpensesforCommercial

Full-Claim Members

StatewidecommercialTMEforthefull-claim memberswas$430permemberpermonth (PMPM)in2013,a1.7%increasefromthe

$423PMPMin2012(Figure4.2).56

CommercialTME byServiceCategory TMEiscomposedprimarilyofpayments madetohospitalsandphysicians.In2013,

asin2012,hospitalandphysicianservices

includingnon-claimpaymentsaccountedfor

75%ofstatewide commercialTME(full-claim populationsonly).7Allservicecategories exceptOtherMedicalgrewmoderatelyfrom

2012to2013.Spendingforhospitaloutpatient serviceshadthegreatestincreaseofallservice categoriesfrom2012to2013at3.8%.This growthcouldberelatedtoanincreasein outpatientvolumeand/oranincreaseinprices paidforhospitaloutpatientservices.Other servicecategorieswithnotableincreasesin growthratesfrom2012to2013include:non- claims(1.5%)andnon-physicianprofessional services(3.7%).

Figure4.2:StatewideCommercial FullClaimsTMEPMPMbyServiceCategory 2012-20138

4See TechnicalAppendixandtheTotalHealthCare ExpendituresMethodologyPaper.Availablefrom:

http://www.mass.gov/chia/docs/r/pubs/13/thce-methodology.pdf(AccessedAugust19,2014).

5StatewideTMEisnotadjustedforthehealthstatusofpayers’coveredmemberpopulations sincethetoolsusedforsuchadjustmentsvaryamongpayersresultinginadjustmentsthatare notuniformordirectlycomparableacrosspayers.

6Thisinitialassessmentincorporatesuptofourmonthsofclaimsrun-out,andincludesestimates

forclaims completionand projectedfinancialsettlements.

7Non-claimspaymentsaregenerallymadetophysiciangroupsandhospitalsforquality

performance, financialsettlements,and other purposes.

inoverallhealthstatusofitsmembers,which maycontributetoalargerproportionalgrowth inBCBS’H.S.A.TME.Withoutadjusting

formemberhealthstatus,TMEforBCBS

increasedby2.1%.

Table4.1:UnadjustedandHealth- StatusAdjustedTMEforCommercial Full-ClaimMembersbyPayer

4.1

Unadjusted andHealth-StatusAdjustedTMEforCommercial Full-Claim Members byPayer

a.Commercialpartialclaims arenotshown due tothevariabilityofcoveredbenefits/servicesbetweenpayers.

b.Cigna reportedonenewlineofcommercialbusinessfor2013whichwasnotincludedinthetable.Pleasesee theDataAppendixfordetailedinformation.

c.CeltiCarealsohadasmallsizeofcommercialbusinesswithtotalof6,060membermonthsin2012and7,379 membermonthsin2013.

d.BMCHealthNetand Network Healthbeganofferingcommercialfull-claimproductsin2013. Thesizeofthe

commercialbusinessisverysmallforthesetwopayers:totalof5,020membermonthsforBMCHealthNetand

2,609membermonthsforNetworkHealth.

8NotethatthepercentagechangesinFigure1.2arecalculatedfromthefulldollarvalues,and maynotmatchtheroundedvaluespresentedinthechart.

9ThetoolsusedforadjustingTMEforhealthstatusofapayer’scoveredmembersvaryamong payerssothatadjustmentsarenotuniformordirectlycomparableacrosspayers.Pleasenote that TMEdataisnotadjustedfordifferencesincoveredbenefits withinpayersand between

payers. Thus,theunadjusted TMEreflectstheactual spendingforeachpayer’smemberswithout adjustingfordifferencesinbenefits and member health status.Healthstatusadjusted(H.S.A.) TMEforthecommercialpartial-claimpopulationsarenotcomparablebetweenpayersduetowidevariationincoveredservices,andthelackofuniformityinhealthstatusriskadjustments.

For more information, please contact:

CENTERFORHEALTH INFORMATIONANDANALYSIS

TwoBoylstonStreet

Boston,MA02116

617.988.3100 www.mass.gov/chia

Publication Number14-245-CHIA-05