Thursday, July 17, 2014

Lower prices, not higher prices

The Health Policy Commission has submitted comments to the Trial Court for its consideration of the proposed settlement between the Attorney General and Partners Healthcare System.  It is a comprehensive filing that points out many of the flaws in the proposed settlement.  But there is one pithy paragraph that gets to the heart of the matter:

This point is reminiscent of one I made a few days ago:

In summary, where [the AG] goes wrong is . . . in assuming that market dominance will lead to price reductions to the consumer.  Indeed, she expressly anticipates that Partners' rates will not go down and instead builds in increases.  This result is inconsistent with the federal goals of health care policy, which can only be met if competition is forced upon the marketplace.  Price reductions to consumers must be our goal.  The only way to achieve that is to use the method that has been employed against other market dominant firms in other industries: Divestiture or dismemberment of key strategic assets to permit a contestable market to emerge.  Here, that must mean a split between MGH and Brigham and Women's hospitals.

1 comment:

nonlocal MD said...

I think this brouhaha and the ho-hum reaction from the public points up the last big flaw in health care reform - the failure to put enough skin in the game for the patients. Like it or not, this is the only effective method to drive competition and lower prices. Partners has skillfully capitalized on the public's lack of concern about its higher prices by consistently emphasizing its 'better' care. ("This is what good care costs", if I recall a certain CEO's quote).