Sunday, May 19, 2013

Dominance visualized

For those of you who don't believe me when I talk about the problems related to market dominance in health care, I refer you to a recent post by John McDonough, one of the stalwarts of public concern for the health care system.  Focusing on Massachusetts, John links us to recent reports produced by the Blue Cross Blue Shield Foundation.  John properly expresses "kudos to Massachusetts Health Quality Partners which did the legwork on this terrific resource."  He notes:

If you want to begin to understand why Partners Healthcare is so dominant in the state's healthcare market, don't go to this page, Hospital Systems by Size, on which Partners is #2 after Steward Health Care System.  Go this this page: Physician Networks and Major Medical Groups, where the size of Partners' physician network (called Partners Community Healthcare Inc., PCHI, or "peachy") is larger than #2 (Steward) or #3 (Atrius), combined. 


I don't see it listed, but I am guessing that a chart of specialists would be even more skewed to Partners. Remember this chart produced by the system for its presentation to Wall Street?


That helps explain this point raised by John:

Or look at hospitals by Net Patient Service Revenue, and see that Partners total NPSR in 2010 ($4.2 billion) was the same as #s 2 (UMass Memorial), 3 (Steward), and 4 (Beth Israel Deaconess) combined.

John ends his article by saying:

So much more to explore in this highly useful and accessible tool as the state debate over cost and market dominance continues.

Except for one thing:  I'm not sure what John means about state debate over market dominance in Massachusetts.  Sure, the new state law has a provision that:

Establishes a new “Cost and Market Impact Review” to examine provider organizations to determine whether any provider's market concentration exceeds certain federally-established parameters. If the Commission determines, based on its review, that actions of a provider constitute unfair practices or unfair methods of competition or other violations of law, the Commission must refer the matter to the Attorney General for further action.

The problem is that that game is over.  There is no way the Massachusetts AG will have the authority to break up an existing health care system.  If s/he tried, the legal process for getting there would take forever.

No, the focus in Massachusetts remains with a misplaced belief that moving the system to one based on capitation will solve the cost problems. (Look at these comments by the chairperson of the state health policy commission.)  In addition, there is to be a consideration of the potential for consumer-driven health plans (those with a high deductible component or a health savings account) to influence customer behavior in the selection of doctors and hospitals.

While I am not sanguine about the efficacy of the latter, a condition for its success would be real-time total price and quality transparency, at the consumer level.  As Barry Carol notes in a recent comment on this blog, "Perhaps CHIA in MA can lead the way toward true price and quality transparency in healthcare so both patients and referring doctors can much more easily identify the most cost-effective high quality providers and steer their business to them."

4 comments:

Zagreus Ammon said...

I am starting to believe in the idea of consumer health plans if they function like co-ops or are designed around PCMH and effective primary care financed by direct pts...

Anonymous said...


The numbers above understate Partners market dominance for the following reasons:

1) They are state wide numbers, when the market in Eastern Massachusetts has different dynamics from Central and Western Mass.

2) Partners Mkt share doesn't include groups with which it has close alliances. For instance, Dana Farber has a close "CLINICAL" alignment with Partners and specifically Brigham and Womens.

3) Partners community has concentrations of doctors at certain hospitals which it thereby dominates. Hallmark, Emerson, and Milford are all examples of this.

4) Partners has requested that it be allowed to include in its network: South Shore, Hallmark and Cooley Dickson (which is outside the Eastern Mass market and not included in the figures below)

5)Cape Code Healthcare announced last fall a strengthening of its relationship with Brigham and Womens and Cape Cod Healthcare doctors group is controlled by Steward, which we will see below, matters.

6) Paul has said many times that Steward's tertiary care network is now Parters. So Steward now functions as another portion of the Partners community network.

If you look at Net Patient Service Revenue (for 2011) for Eastern Mass, which is defined as those hospitals East of Worcester, not in the UMass system and leave out Childrens which is a specialty hospital, Partners dominance is much greater.

It is approximately 43% in Eastern Mass for Partners hospitals plus Dana Farber, Mass Eye, South Shore, Milford, Emerson and Hallmark

If Steward and Cape Cod healthcare are included it is approximately 55%.

This is truly monopoly level power.

Anonymous said...

Anonymous makes good points including the role of Dana-Farber.

Also omitted from the BCBSMAF report are the considerable other services and facilities with which Partners has substantial-to-dominant market share: McLean Hospital (behavioral health), Spaulding Rehab (a total of 6 inpatient facilities plus multiple outpatient units; the flagship campus is being replaced by a brand-new facility on the waterfront), and Partners Homecare which began acquiring a number of community home care agencies back in the 90s and is now quite large.

Anonymous said...

Paul - Let's not forget the other monopoly which is Children's Hospital. Not only have they drawn in many community PCPs with their higher fee schedules but they also draw in many of the Pedicatric patients from other networks. Steward has something like 30% of all of their covered commercial lives with PCPs who are Pediatricians. Steward has little to no Pediatric services so all of that care ends up largely at Children's. They may not have the number of directly affiliated PCPs as Partners but they probably have close to that number feeding into their specialists and hospital (even though technically these Pediatricians are listed with Steward or Atrius or another network).