AG: State should monitor hospital sales, partnerships for impact on market clout

The pace at which hospitals and doctors are consolidating or forming new affiliations could enable some health systems to gain significant market power, a factor that already contributes to high prices for medical care in Massachusetts, according to the latest report on health costs released Wednesday by Attorney General Martha Coakley.

Coakley highlighted market clout as a driver of health care costs in a 2010 report. The latest findings point to the rate at which hospitals are consolidating or expanding their contracted physician networks, in the name of better care coordination for patients or management of risk-based insurance contracts under which providers could lose money if patient care is too expensive.

But, the reports says, the state’s most powerful health care systems have more resources to attract providers from whom they may benefit financially, ultimately increasing their overall clout—and, possibly, health costs.

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The report says the state should monitor those partnerships, requiring hospitals to report on how they pay physicians, whether new affiliations will lead to increased payments, and how they could ultimately reduce overall health care costs.

The report also highlighted the continued growth in insurance plans that require patients to pay more to see doctors who are deemed to be more expensive or who are outside a limited physician network.

The Globe asked some who watch the health care market closely to weigh in with their first impressions.

Brian Rosman , research director at consumer group Health Care for All, wrote:

The latest Attorney General report continues to add to the transparency that is critical for good health policymaking. The report demonstrates the rapid change that is happening in health care in Massachusetts, and the need for common ground rules as the health care industry creates many different financial models that impact on patient care.

We are disturbed to see more employers move to imposing high deductible plans on workers, and plans that limit patient choice. The report demonstrates that high deductible plans do not lower total health spending, but only shift costs to patients. The next step will be to fashion policies that protect patients and move towards better care, focused on keeping patients healthy.

Lora Pellegrini , president of the Massachusetts Association of Health Plans, wrote:

The Attorney General has once again produced a report that provides invaluable insights into the Massachusetts market place. As today’s report highlights, the prices providers charge, not patient utilization, remains the main cause of continued increases in health care costs. Additionally, consumers and employers are selecting tiered, limited and broad network products to meet their health care needs.

It will be important to consider these facts when setting health policy here in the Commonwealth. Additionally, we agree with the recommendations in the Attorney General’s report that more robust data is needed to monitor changes in the marketplace and any changes should be reviewed as to whether they will lower or increase costs for employers and working families.

A spokeswoman for the Massachusetts Hospital Association e-mailed this statement:

MHA commends the AG for her call to establish protections for care providers that take on insurance risk. We also share the Attorney General’s concern that incentives offered to consumers to persuade them to select certain caregivers could conflict with providers’ requirements to manage patient care under global budgets. This is just one example of major policies that require careful discussion and planning as we address complex issues that were not fully resolved in Ch. 224 [the health cost control bill passed last year].

MHA and its member hospitals are very concerned about the impact on hospitals and other providers of additional administrative burdens and bureaucratic reviews called for in the report. Hospitals are focused on doing their part to redesign the complex health care delivery system in an efficient and rapid manner. In doing so, they have to abide by all the requirements imposed by federal and state regulations, as well as the requirements imposed by the private market. The government has a responsibility during this difficult time of transition to ensure that their oversight does not create unwarranted burdens that add to complexity, inefficiency, and waste.