Monday, March 16, 2009

The Boston Massacre - The Blueblood hospitals assault the suburbs in Boston

It's getting ugly up in Massachusetts. While the state was initially celebrating it's plan to offer near universal health coverage, it's now bankrupting the state. They're now looking for "creative" solutions to paying for this. Today's New York Times (click here) writes

"They want a new payment method that rewards prevention and the effective control of chronic disease, instead of the current system, which pays according to the quantity of care provided. By late spring, the commission is expected to recommend such a system to the legislature......Some health policy experts argue that changes in payment practices will not be enough to slow the growth in spending, even when combined with other cost-cutting strategies. To truly change course, they say, the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care."

Complicating the landscape is the leverage that Boston Children's Hospital, Massachusetts General Hospital (MGH) and Brigham & Women's (B&W) Hospital have used in negotiating their fees from insurers (see here). Each of these providers (MGH & B&W merged under a relationship called Partners) has such market clout that they've been able to dictate terms to insurance companies that capture 15-20% premiums compared to their competitors in Massachusetts. While their fees are not way out of line compared to national figures, they're much higher then Massachusetts' peers. Partners has also ruffled feathers of it's competitors by buying up hospitals and opening satellite clinics in the suburbs of Boston and greater Massachusetts. This begs the question of whether it's fair to penalize Partners for leveraging the bargaining power of their brand names to cut better deals. I say hell no!

This "premium" for Partners hospitals and providers is now a tantalizing target for Massachusetts to attack in their cost containment plans I figure. The low lying fruit for these measures is always the doctors reimbursements. Expect this to get real ugly in the next few years there.


1 comment:

Raymond M. Seballos, MD said...

Rob, I've already seen it here in
Cleveland. The big named hospital here has negotiated contracts with the insurance companies that pay more for ancillary services such as radiology, labs, and hospital stays, etc. The smaller hospitals and private practicing doctors have no such leverage, so we get the short end always. If you think they will cut the Partners fees in Mass., what do you think they'll do to the competitor hospitals and private practitioners outside the big 3 hospital systems. They'll go out of business, I guarantee it. -Ray