Abstract
This report examines the factors that contribute to high health care costs in Massachusetts, including the structure of the health care system and the payment methods currently used by Massachusetts health insurers. Understanding these factors will better prepare the Commonwealth to evaluate and develop reforms that have the potential to simultaneously contain cost growth and improve quality.
Data describing the Massachusetts health care system are drawn from various published sources. Data on payment methods are based on the results of a 2009 questionnaire administered for the Division of Health Care Finance and Policy, in which Massachusetts insurers documented the ways in which they pay hospitals, physicians, and intermediary organizations (medical groups, Independent Practice Associations [IPAs] and physician-hospital organizations [PHOs]).