IN 2012, the Massachusetts Legislature passed Chapter 224, “An Act Improving the Quality of Health Care and Reducing Costs Through Increased Transparency, Efficiency and Innovation.” This landmark legislation was designed to contain health care costs while expanding access and improving quality across the Commonwealth.
Thirteen years later, access to primary care and emergency department services has worsened, multiple hospitals have gone bankrupt, including 10 in 2024 alone, and Massachusetts health care costs per capita remain among the highest in the country. Moreover, insurance company pre-authorizations and claim denials have gone up, and provider burnout has significantly increased.
We all want sustainable and convenient access to primary care, timely emergency care, and reasonably priced health insurance. To get there, a legislative push that rivals Chapter 224 is needed to reframe our health care system into one that prioritizes patients and those caring for them.
Now is the time for providers, payers, and legislators to come together to develop solutions that reduce administrative burdens for providers, increase investments in primary care, and strengthen safety net institutions. But this must start with a frank conversation, grounded in facts, about the perilous state of Massachusetts health care.
Here are the facts about where things stand in the Commonwealth, based on available data:
- Emergency department wait times, the number of patients leaving without being seen, and the boarding of patients in emergency departments have never been worse.
- 10 hospitals in Massachusetts were bankrupt in 2024, and several others are expected to default on their publicly traded debt in 2025.
- The average commercial insurance rates negotiated and paid to Massachusetts hospitals rank as the 5th lowest among the 50 US states, and physician rates are the 3rd lowest.
- Health care costs per capita are among the highest in the country, despite low reimbursement rates paid to hospitals and physicians.
- And, according to the state’s Center for Health Information Analysis, the average health care system operating margin over the past 5 years is -1.7 percent.
At the heart of the Massachusetts health care crisis: Primary Care
The lack of access to primary care in Massachusetts is driving up the overall cost of health care. Two major factors that account for poor access to primary care are the inadequate number of primary care providers and the extremely inefficient use of the providers we have. Our primary care providers want to see more patients and improve access, but they are unable to do so because they are completely overwhelmed with non-patient-facing administrative duties, including obtaining preauthorization from insurance companies, managing denials for payment, providing excessive documentation to get paid from insurance companies, and, most recently, tracking dozens of quality metrics, many of which have little impact on the quality of care they deliver.
We do not have access to primary care providers in this state because we won’t let them do their job: primary care. Primary care burnout is at an all-time high, and many providers cite the intricacies of administrative burdens as a leading cause. Requiring providers to fulfill excessive administrative tasks takes them away from caring for patients.
Moreover, accountable care organization (ACO) contracts are forcing primary care providers to assume financial risk for the total medical expenditures incurred by their patients, a large part of which they have very little control over. An ACO contract is an agreement between a group of health care providers and Medicare that defines how they will work together to manage the quality and cost of care for a specific patient population. In theory, this model incentivizes efficiency, but in practice, it often burdens primary care providers with financial risk for costs—such as hospitalizations and specialist treatments—that they have limited ability to influence.
These contracts are built on the assumption that primary care providers are ordering excessive tests, prescribing unnecessary expensive medications, and making unwarranted specialty referrals because they are not incentivized to deliver efficient care. While improving cost-effective and efficient care is necessary, all the primary care providers I know have one incentive: to improve the health and well-being of their patients. Discouraging physicians from ordering a test they believe their patient needs by penalizing them financially has increased burnout among primary care providers and caused harm to patients.
Full emergency departments and unstaffed post-acute facilities
When the primary care system breaks down, as it has broken down in Massachusetts, patients go to the only 24/7/365 health care store that is open: the emergency department. Emergency departments in Massachusetts are completely overwhelmed. Patients who could have been seen and treated earlier in a primary care setting are coming to us later, sicker, and requiring much more intense therapy.
It is common for patients in our trauma center to spend their entire admission on a cot in the emergency department, instead of on the inpatient floors. Why? Because hospitals are at or over capacity, struggling to discharge patients from inpatient floors into post-hospitalization care environments like skilled nursing facilities, due to significant staffing shortages in those settings that limit the number of patients these facilities can accept.
In a recent survey by the Massachusetts Health & Hospital Association, there were 2,000 patients “stuck” in Massachusetts acute care hospitals awaiting discharge to a post-acute care setting. Many of these patients were stuck because they needed insurance approval before being moved to another site of care. These extra days spent waiting are not covered by insurance companies, so hospitals are solely responsible for the costs incurred during this transitional period. This has been a major contributing factor to the deterioration of hospital finances.
Our system is perfectly designed to get the results it gets
Excellent work has been done to describe the difference between the US health care system and other wealthy nations that have significantly lower costs and better access to primary care. There are four main reasons our health care system costs so much more than others:
- We spend five to 10 times as much on administrative functions as the rest of the world.
- We charge our doctors and nurses much more for their education and we pay them twice as much as the rest of the world once they start working.
- We pay twice as much for pharmaceuticals.
- In most countries, the majority of physicians are primary care providers. In the US, most physicians are specialists.
The most surprising findings from studies comparing the US health care system to the health care systems of other wealthy nations is that our hospitalizations per capita and our physician visits per capita are lower than the rest of the world. We don’t have a utilization problem; we have a price point problem.
Another significant finding from these studies is that physicians in other countries are far more efficient because they are not weighed down by the immense administrative burden imposed by the US insurance system.
Solutions to consider
We all want the same thing – sustainable and convenient access to primary care, timely emergency care, and reasonably priced health insurance. How can we get there in Massachusetts, assuming a federal single payer system is unattainable?
Should we increase the rates paid to all hospitals and physicians to keep them viable, accepting that this will drive up health insurance premiums? Should we lower rates paid to hospitals and physicians to bring health care costs down and watch more hospitals and physician groups go bankrupt? Should we do nothing and just hope for the best?
No, to all the above.
The key is to focus on solutions that can lower the cost of care, improve the viability of health care systems, and expand access to primary care. Here are a few things that the Massachusetts Legislature should consider:
- Legislatively reduce the administrative burden on providers by passing laws that limit the scope of prior authorizations, reduce the time a payer has to approve them, and penalize payers for inappropriate payment denials. Massachusetts is way behind the rest of the country in this area. Increased oversight of payers will improve access to care by freeing up primary care providers to be…primary care providers.
- Limit the amount of insurer spending that can be used for administrative costs to 5 percent of total expenses. The federal government runs Medicaid with an administrative cost of just 3 percent. There is no reason the private sector should need to allocate 15 percent of premium dollars to fund administrative functions.
- Raise primary care reimbursement and improve access to preventative health services to reduce the overall cost of care, allow struggling health care systems to grow, and keep patients out of the emergency room. This can be done by passing the Primary Care for You legislation filed and championed by state Sen. Cindy Friedman, co-chair of the Joint Committee on Health Care Financing. Another option is setting a floor on commercial insurance rates paid to primary care practices at 250 percent of Medicare rates (the national average).
- Protect safety net hospitals that care for low-income residents by mandating that pharmaceutical companies continue providing drug and pharmacy discounts to certain hospitals caring for a disproportionate share of Medicaid patients. Hospitals use the cost savings from these discounts to pay for vital, but loss-generating, services and programs.
- Use Medicaid funding to add new residency positions for primary care, which would increase the availability of these roles in areas with the highest need. Currently, Massachusetts is one of only seven states that does not use Medicaid funding to support residency programs in its teaching hospitals.
These proposed changes require buy-in and compromise from the stakeholders that are part of the health care industry. But if we don’t act together quickly, we’ll never address the root sources of the problems destabilizing our industry and making it harder for patients to receive the care they need.
Eric Dickson, MD, is CEO of UMass Memorial Health in Worcester and a professor of emergency medicine at UMass Chan Medical School.
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