The Effect of the Massachusetts Health Care Cost Growth Benchmark on Hospital Revenues and Other Spending Outcomes: Associations with Hospital Revenue, Hospital Prices, and Insurance Premiums.

In this study, the authors evaluate the effects of Massachusetts's health care cost growth benchmark-established in 2012 to constrain health care spending-on hospital revenues, health care prices, and health insurance premiums. The cost growth benchmark, enforced by the Massachusetts Health Policy Commission, sets annual spending growth targets and includes accountability measures for providers and payers. Although the cost growth benchmark was exceeded in most years since 2013, the policy may have slowed spending growth compared with what would have occurred otherwise. The study uses four statistical approaches to estimate the benchmark's effects, comparing Massachusetts hospitals and counties with various groups of hospitals and counties in other states and employing pre- and post-policy data. Results were mixed and method-dependent: Some approaches suggested that the cost growth benchmark reduced inpatient and outpatient hospital revenue and prices, while the authors found no significant effects in other approaches. There was no evidence that the benchmark affected health insurance premiums. The analysis was limited by confounding factors, especially the near-simultaneous implementation of the Affordable Care Act, and by differences among Massachusetts and comparison states. The authors caution that findings are exploratory and not causal. Overall, the evidence that the Massachusetts health care cost growth benchmark reduced hospital revenue and prices was weak and inconsistent. The authors suggest that stronger enforcement or complementary policies may be needed to more effectively control health care spending growth.