“It is going to have consequences that I think should concern all of the local payers”
BOSTON, JAN. 30, 2025…..Confronting soaring health care costs compounded by widespread obstacles in accessing care, top insurance executives warned Thursday that the state’s health care system is at a breaking point.
New payment models could help alleviate the industry’s financial woes, particularly in the primary care landscape, they said.
The heads of Blue Cross Blue Shield of Massachusetts, Fallon Health and WellSense Health Plan offered their sobering perspectives on cost and access challenges in front of hundreds of health care providers gathered at the Massachusetts Health and Hospital Association’s annual meeting at the Westin Seaport.
“The challenges, no matter where you sit in the health care ecosystem right now, are profound,” Sarah Iselin, CEO of Blue Cross Blue Shield of Massachusetts, said during a panel discussion.
Iselin invoked nearly double-digit health care cost trends, which she attributed to steeper medications prices like GLP-1 weight-loss drugs and “higher utilization increases across the board.” Iselin said those trends are driving losses among health insurers. Blue Cross had a “pretty rough” last year, and that trend is expected through 2025, she said.
“It is going to have consequences that I think should concern all of the local payers because the faster health care costs grow, the more tempting it is for employers to go self-insured,” said Iselin, who warned that would “invite more of the national payers into the market.”
Echoing Iselin’s assessment, Fallon Health CEO Manny Lopes said both providers and payers are at a “crisis point.” Meanwhile, WellSense Health Plan President Heather Thiltgen said Massachusetts is “really starting to reach the limits of affordability, for our consumers, our employers and our taxpayers.”
Panelists also discussed initiatives their organizations are pursuing to manage health care costs and bolster access, with an eye toward pinpointing potential statewide strategies.
Assistant Secretary for MassHealth Mike Levine said state officials over the last two years “significantly increased” investment in primary care by embracing a capitated payment model rather than a fee-for-service structure. That move creates a more predictable monthly revenue stream for primary care practices, Levine said.
“I don’t think there are enough practices in Massachusetts with a high enough Medicaid payer mix for that to be the thing alone that will transform care and experience for providers and members,” Levine said. “But we are eager to partner with providers and other payers to build a model of capitation in the primary care setting that will hopefully unlock some of the access that has been so hard to find.”
Gov. Maura Healey and Senate President Karen Spilka have pegged primary care as a priority for the new legislative session. A primary care task force, established through the new hospital oversight law, will produce recommendations to improve care access, delivery and financial sustainability.
Healey, during remarks earlier Thursday at the MHA meeting, said her fiscal 2026 budget proposal looks to boost MassHealth investment in primary care to “10% of its total spend moving forward.”
“We know that without that proper investment, we can’t support our primary care workforce, we can’t give patients better access to the care they deserve,” the governor said. “And we think there’s an opportunity for all of us together to look at how we can prioritize primary care.”
Lopes highlighted another capitated program at Fallon Health, which he said serves the frailest elderly members who are considered eligible for nursing homes but receive comprehensive at-home care.
“The goal is to try to keep those individuals out of institutions, living in the community and living healthy in the community, and bring all the support services for them and their families,” Lopes said. “When I look at that model, it really is a model that we can apply to other frail populations or severely ill populations, where we really create an environment of capitated payment — create an environment where someone can come in and get the care that they need.”
Thiltgen said WellSense, which serves a large share of people with Medicaid and highly-subsidized ConnectorCare coverage, said members have “considerable access problems” for behavioral and primary care. She said the health plan is exploring how to better integrate care, including for individuals with substance use disorder.
“We are experimenting with putting nurse practitioners in providers’ offices so that we can help providers more efficiently understand who needs the care, and provide that bridge and help improve overall quality,” Thiltgen said.
