RI Health Providers Earn Less Compared to MA and CT Counterparts
TL/DR –
Rhode Island has managed to keep health care spending growth lower than Massachusetts and Connecticut, which has resulted in Rhode Island’s private health insurance premiums being lower than those in other states and the national average. Despite these lower costs, many health care providers are in a precarious financial position, with the average operating costs at Rhode Island’s acute-care hospitals increasing by 17% between 2018 and 2022, while the average net revenue per patient discharged only rose by 9%. The report also revealed that Rhode Island had a 5% lower inpatient acute hospital utilization rate than Connecticut and a 12% lower rate than Massachusetts in 2021.
Rhode Island Outperforms Neighbors in Health Care Spending Growth Control
Rhode Island has excelled in controlling health care spending growth, overshadowing neighboring states Massachusetts and Connecticut, according to a report commissioned by the Rhode Island Foundation. However, hospitals and health care providers are bearing the financial brunt of these cost-containment measures.
The analysis by Manatt Health reveals that private health insurance premiums in Rhode Island have remained lower than neighboring states and the national average. Furthermore, payments from government insurance plans, Medicaid and Medicare, are mostly lower, but with Connecticut’s per-enrollee Medicaid expenditures being an exception.
Rhode Island’s health insurance premiums emerge as a relative bargain in this context. The Manatt study highlights that the state’s Small Group private health plans offer more generous benefits compared to their New England counterparts, while being less costly. Rhode Island’s inpatient hospital care usage is also less than its neighbors’, with a 5% lower inpatient acute hospital utilization rate than Connecticut and 12% lower than Massachusetts in 2021.
While Rhode Island’s healthcare spending isn’t declining, it is rising at a slower rate than in Connecticut and Massachusetts.
Financial Challenges for Rhode Island Health Care Providers
The report confirms predictions about the precarious financial position of many healthcare providers. Between 2018 and 2022, average operating costs at Rhode Island’s acute-care hospitals increased by 17%, while the average net revenue per patient discharged rose by just 9%. These financial challenges extend beyond Rhode Island; although Massachusetts and Connecticut generate more revenue per patient, they also have higher expenditures.
In the fiscal year commencing July 2022, the operating margin of Rhode Island health systems stood at -3.4%, compared to -3.8% in Connecticut and -4.5% in Massachusetts.
Low Health Costs in Rhode Island: A Success or A Point of Concern?
According to the report, Rhode Island’s lower health costs may be attributed to insurers having greater leverage over providers than those in other states. Blue Cross & Blue Shield of Rhode Island, one of the funders of the Manatt report, claims that private insurer reimbursements for hospital services are suitably aligned with neighboring states based on Medicare reimbursement.
Implications for Health Care Policy Scrutiny
The Rhode Island Foundation commissioned the data analysis to establish baseline information about the health care delivery system’s financial structure. The findings are crucial as elected officials consider various policy options. The report will feed into the ongoing policy debates, including a 25-bill health care package proposed by the Rhode Island Senate, and Attorney General Peter Neronha’s ongoing investigation into health care finance.
Health Care Provider Exodus: Are There Signs?
Despite lower pay rates for providers in Rhode Island, the data does not conclusively show an exodus of providers from the state. In 2020, the most recent data available, Rhode Island had a higher ratio of primary care physicians and emergency medicine doctors than its neighbors, but fewer specialists such as cardiovascular physicians. The state also had fewer per capita physician assistants but the most per capita nursing assistants compared to Massachusetts and Connecticut in 2022.
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