Time for a re-hearing on rate issues

Now that radio shows are put on the web, you can listen to things a few times.  This is really handy when you think you hear something that doesn't hold water.  You can check and see if your first impression was correct.

Today, I thought I heard a lot of leaky buckets in a WBUR interview with a hospital president.  Upon listening again, I discovered I had been correct.  As is often the case in such interviews, each statement sounds correct, but important details are left out.

At minute 7:  "We have converted our two major commercial contracts – with Blue Cross and Tufts -- to global payment contracts, so we are doing population health management in a major way."

Compare this to coverage in the Boston Globe when the contract was announced:

"The new contract, while giving fresh momentum to efforts to overhaul how health care is paid for, covers only about 25 percent of the Partners patients insured by HMO Blue."  HMO Blue, a managed care product, is itself but a component of the total Blue Cross subscriber base, which also includes traditional insurance products.  (I think HMO Blue covers about 900,000 of the approximately 3,000,000 subscribers.  I am happy to be corrected on that if I am wrong.)

After being asked for an opinion with regard to the House of Representative's proposed "luxury tax" on high-priced hospitals, offer a "Washington Monument" argument to scare people about required budget reductions:

At minute 11:  "The impact might be to force us and others to cut back on the amount of research we are doing.  I don’t think that for this region that would be a good thing."

If that proposal passed, how would you justify your higher rates?

At minute 12:  “We would try our best to justify the prices we know compared to other top-ranked hospitals around the country that our costs are in line.  But I’d rather devote that effort to improving care and making it more affordable rather than justifying prices that have been negotiated in the marketplace."

But what do you think about the Attorney General's conclusions that that there is a disconnect between rates charged and quality delivered, saying that the negotiated rates are mainly a result of market power?

At minute 13:  "Our ability to measure quality in health care is very rudimentary, and so I respectfully disagree."

Dear legislators, let's take him at his word.  If you can't measure quality differences in health care, there should be a rebuttable presumption that rates should be equal, unless the insurer can demonstrate to a rate-setting body that a differential is warranted.  As noted in that same Boston Globe story:  "The new contract won’t end payment disparities between top-paid providers and struggling community hospitals, which also are being asked to accept smaller pay increases."

The current pricing regime is characterized by secret negotiations between the dominant insurance company and the dominant provider group, which  has led to persistent and pervasive over-pricing of that system's services.  This argument is not solely about the cost of care at, and prices paid to, one academic medical center:  It is about the price paid for care in the entire system (physicians and hospitals) of which that AMC is but a part.  There is a need for independent oversight over parties that clearly are not interested in solving the problem.