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White Coat Notes

Doubts weaken health cost data

Some health policy analysts and provider groups cheered last year when results from a 2010 national survey of employers showed that Massachusetts no longer had the most expensive health insurance coverage in the country. But the latest data show that the family plans offered through Massachusetts employers once again cost more, on average, than in any other state.

“I’m not surprised,” said John McDonough, director of the Center for Public Health Leadership at the Harvard School of Public Health.

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The idea that Massachusetts fell so dramatically last year in relation to other states was “wacky,” he said. “It’s a cautionary tale, in terms of never taking too seriously statistical news that shows such a sudden shift in either direction.”

The average family premium in 2011 was $16,953, including what both employer and employee pay. That’s about 16 percent higher then the 2010 average, $14,606. Meanwhile, the national average increased about 8 percent.

Because the data are based on a survey sample of employers, and not on more complete market reporting, the figures may not accurately reflect year-to-year changes in state averages and there may be little actual difference between costs in Massachusetts and other expensive states, such as New Hampshire, where the family average was $16,902.

Plus, the sample is not made up of the exact same employers each year, which could account for some of the variation over time.

Last year, as the debate on Beacon Hill about how to control health costs heated up, provider groups and others said the 2010 federal data and a Commonwealth Fund report analyzing it showed that the market was already regulating itself.

Lynn Nicholas, chief executive of the Massachusetts Hospital Association, wrote on the group’s website in November that the change was “a great start.”

“It’s also evidence that the market’s efforts to slow the cost of health care increases are working, and that government intervention in price regulation would be premature,” she wrote.

Several prominent health policy experts raised doubts then about the numbers.

The national survey is generally thought of as a strong measure of premium trends, said Nancy Turnbull, senior lecturer and associate dean at the Harvard School of Public Health. But, she said, at the state level the survey results have too much volatility to be trusted. For example, the average premium cost at the largest employers, those with 1,000 employees or more, decreased 9 percent in 2010 and then increased 22 percent in 2011.

The double-digit increase in 2011 prices in the survey doesn’t correlate with what seems to be happening in the insurance market, with carriers holding costs down and negotiating new contracts with doctors and hospitals, said Michael Widmer, president of the Massachusetts Taxpayers Foundation.

“There’s a lot of other evidence that we slowed the rate of growth of costs,” he said.

Chelsea Conaboy can be reached at cconaboy@boston.com. Follow her on Twitter @cconaboy.
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