Counterintuitive Thoughts on Healthcare Costs

By Steve Poftak
August 21st, 2007

Back in October, we released a paper on business costs in Massachusetts. One of the surprising conclusions was that our healthcare costs were not terribly out of line with our competitor states. This was a real surprise and ran counter to a lot of the anecdotal data floating around.

A fascinating entry in WBUR’s Commonhealth series sheds some light on the discrepancy. If you measure by average premium (which we did), we are not that far out of whack. If you measure by some variation of healthcare’s share of the Massachusetts’ economy, then we are massively out of line.

David Torchiana, of the Mass. General Physician’s Organization argues that the second measure includes NIH expenditures and the costs associated with non-Massachusetts residents coming here to receive care. Neither of which is really a burden on the economy.