"I really like that chart . . ."

. . . because it says it all," noted Ellen Zane, CEO of Tufts Medical Center, in a semi-joking, semi-serious manner. Ellen and I were called back as witnesses at the end of today's hearings on health care and insurance cost trends.

Tufts Medical Center is a competitor of BIDMC, but Ellen and I share views on several topics. This is one. Even though the light orange BIDMC "bubble" appears slightly better off than the Tuft's blue "bubble" in the chart above, the larger societal issue needs to be addressed. It is hard to imagine that the Legislature and Governor really intend the citizens to be served by a health care system that rewards certain providers for their market dominance, especially with no evidence that they offer higher quality.

Ellen explained that, consistent with the findings of the Massachusetts Attorney General, "The funneling of dollars disproportionately among hospital and provider groups serves to warp the overall system balance." She mentioned that one result of this is to allow better paid systems to recruit away doctors to their networks, a result documented by the AG in the chart below.


Ellen pointed out that this result is exactly counter to sound public policy, which should rather encourage the lower cost systems to expand. She agrees with Blue Cross Blue Shield and others that a movement away from fee-for-service payments to capitated contracts will prompt greater efficiency, but she set forth a warning (one my readers have seen before):

"Global payments in and of themselves will not stop the warping behavior," she said. "Unless we deal with distortions in the market, that kind of pricing will do nothing to alleviate the system's problems."