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Partners rebuts AG’s findings

Quality of care, not hospital clout, driving costs up, report says

By Liz Kowalczyk
Globe Staff / June 18, 2010

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A report commissioned by Partners HealthCare rebuts a pivotal investigation by Attorney General Martha Coakley’s office, which found that the market clout of the best-paid providers in Massachusetts is a main driver of the state’s spiraling health care costs.

In a 14-page analysis Partners released yesterday, former state public health official Paul Dreyer said that the attorney general’s staff used flawed methodology to reach conclusions in its 77-page report, and that a major reason the cost of health care has soared in Massachusetts is that hospital quality overall has improved — not because influential providers have demanded higher fees.

The attorney general’s office issued a statement yesterday saying that it stood by its findings, and that “nothing in the Partners report’’ calls those conclusions into question. Two health care specialists at the Harvard School of Public Health also took aim at Dreyer’s report, saying that some of his conclusions are flawed and that others actually support the attorney general’s findings.

Partners, the state’s largest hospital and physician network, has been under growing scrutiny for its command of high prices from insurers, particularly at its famous teaching hospitals, Massachusetts General and Brigham and Women’s. In late April, the organization hired Dreyer, former head of the state bureau that oversees hospitals and now a health care consultant, to analyze the attorney general’s findings for an undisclosed fee.

Dreyer found that death rates in US hospitals for six illnesses, including heart attacks, pneumonia, and strokes, fell by between 31 percent and 84 percent between 1994 and 2004. Additionally, he said, Massachusetts ranks third in the United States for relatively low death rates for patients suffering from heart attacks, heart failure, and pneumonia.

“If you look across the states, our hospital quality is very high,’’ Dreyer said in an interview. “That may be the reason we’re among the highest [in health care costs], because we have the highest quality.’’

In its report, the attorney general’s office said “providers in Massachusetts deliver excellent care’’ but found “little material variation in quality.’’ Dreyer, who reviewed a more limited number of quality measures, including mortality rates for three medical conditions and incidents in hospitals that harm patients, found that hospitals do vary in quality.

He said he does agree with one conclusion reached by the attorney general’s office. In interviews with insurers and other research, Coakley’s staff found no relationship between the prices paid to individual providers and their quality. In other words, the best performing hospitals are not necessarily the best paid.

Dreyer, too, said he could not find a relationship between price and quality.

But he said that other assertions by the attorney general’s office are not valid. Her staff found that teaching hospitals and hospitals that care for the sickest patients are not necessarily the best paid, as one might expect. Dreyer found that when these factors and others are considered together, they account for about half of the variation in prices among hospitals.

Nancy Kane and Nancy Turnbull of the Harvard School of Public Health said Dreyer’s conclusion actually supports the attorney general’s findings that price variation among providers is significantly related to other factors like market power.

“Analyses in other states and on a national level have come to similar conclusions,’’ they said in an e-mail. “If the Partners’ price differential were justified by quality or other objectively determined and measured attributes, the health plans themselves would not be complaining about their inability to negotiate fair prices with Partners.’’

Liz Kowalczyk can be reached at kowalczyk@globe.com.