If medical costs experienced by insurance carriers in Massachusetts are rising at a pretty constant 12 percent per year, driving premium increases of similar magnitude, but economic activity is rising at a rate of 3-4%, at what point does the situation become untenable for the businesses in the state?
If the medical cost increases are caused about 50% by unit cost increases for providers and 50% from increases in utilization (especially utilization of tertiary care) by residents of the state, what countervailing forces might come into play to help alleviate the situation?
If the unit cost increases for providers are driven in great measure by salary pressures from health care workers, what might offset those increases?
Some possible "simple answers":
Self-driven and/or payer-stimulated structural changes by providers to increase efficiency and productivity, i.e., reduce dollars per episode of care delivered.
Decoupling of insurance payments from volume to reduce providers' incentives to increase volume.
Support by insurers to enhance the primary care portion of the system, to enable better preventative care and early diagnoses and intervention (aka, attempt to shift the delivery of services away from high end tertiary care back towards the primary end).
Enforced rationalization of care by insurers based on actual outcomes data (including financial incentives to patients) to encourage patients to go to higher quality providers.
Exclusion by insurers of providers who do not offer sufficiently high quality service, either overall or in particular specialties.
Creation of a strong consumer movement to demand disclosure of outcomes data to help drive process improvement.
Creation of a strong employer movement to demand disclosure of outcomes data to help drive process improvement and to create demand for insurers to offer new networks of high performance providers.
What are your questions and answers? If we narrow these down, maybe we can help set the agenda.