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State revises 2015 health spending higher on Harvard Pilgrim error

Turns out health care spending in Massachusetts last year was actually worse than initially reported.

The state’s Center for Health Information and Analysis said Thursday that statewide medical spending increased 4.1 percent last year, up from the 3.9 percent rate the agency previously reported.

The revision came after Harvard Pilgrim Health Care, one of the state’s largest insurers, noticed errors in the figures it submitted to the information center. The insurer erroneously left out $117 million in spending, skewing the numbers for the entire state. After Harvard Pilgrim turned in new data this week, the information center ran the numbers again.


The updated figures show that the state made very little progress in controlling spending between 2014, when spending rose 4.2 percent, and 2015, when it rose 4.1 percent. Massachusetts spent almost $57.4 billion on health care last year, or $8,441 per person.

The state, which has among the highest medical costs in the country, has set a target of keeping total medical spending increases to 3.6 percent a year, in line with projected economic growth. Massachusetts met the benchmark in 2013, then missed it in 2014 and 2015. In all three years, spending grew much faster than inflation.

A spokeswoman for Harvard Pilgrim said the company notified the information center as soon as it discovered its mistakes, which involved medical claims that were not appropriately marked in its computer system. Also, the insurer inadvertently submitted some data from 2014 instead of 2015.

“It was human error,” spokeswoman Joan Fallon said in an e-mail. “We are in the process of fixing the problem that we identified. And, we have instituted better internal quality control processes.”

After receiving the updated information from Harvard Pilgrim, the information center said Thursday that spending on hospital care, doctor’s office visits, and prescription drugs all grew more than previously reported. Total spending in the state’s commercial health insurance market grew 5.3 percent last year, not the 4.7 percent previously reported.


The figures are still considered preliminary and may be updated next year after more data become available.

Stuart Altman, chairman of the state Health Policy Commission, which monitors health costs, called the updated numbers troubling.

“I was willing with the first set of numbers to say it was close enough to the benchmark to not be concerned, but these numbers are beginning to be higher,” he said. “It is a source of concern and something we’re going to be monitoring.”

Health spending in Massachusetts last year still grew more slowly than it did nationally, where the increase was an estimated 4.6 percent. Lora Pellegrini, president of the Massachusetts Association of Health Plans, which represents health insurers, said that was a good sign. But she said the state needs to stay focused on costs, and be especially watchful of large hospitals that pursue mergers or other expansion plans.

Because of cost concerns, Pellegrini’s group urged state health officials this week to reject a plan by Boston Children’s Hospital to grow its campus. Children’s has called the project necessary to keep up with demand.

Timothy Gens, executive vice president of the hospital industry’s trade group, the Massachusetts Health and Hospital Association, said the health care system is making changes to control costs that may take years to show up in the numbers. For example, many doctors, hospitals, and insurers are moving to new types of payment contracts that include set budgets for providing care.


“I think we fundamentally are still making progress [in cost control],” Gens said.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey
@globe.com. Follow her on Twitter@priyanka_dayal.