Sunday, September 28, 2014

You can only shake your head and wonder

The Attorney General's 73-page filing with the Court about her (now slightly revised) deal with Partners Healthcare System deserves at least 73 pages of rebuttal, but that isn't going to happen. You see, as noted in Commonwealth Magazine:

The timing of Coakley's response seemed designed to maximize her aggressive response to her critics and minimize pushback. Her aides released the amended deal, the comments on the original deal, and her responses to them at 5 p.m. on Thursday, too late for her critics to respond. If they do respond on Friday, the news will air over the weekend, when fewer people will be paying attention. On Monday, Coakley's agreement with Partners goes to Suffolk Superior Court Judge Janet Saunders for review.

Then, when it gets to Court, there are only three other parties who have a right to be heard:

~Partners Healthcare System;
~South Shore Health and Educational Corporation, which is seeking to be acquired by PHS; and
~Hallmark Health Corporation, which is seeking to be acquired by PHS.

That's right. This is part of a process that has been termed "transparent" by the Attorney General's office:

Step 1: Negotiate and sign a deal with PHS in secret;
Step 2: Present it to the Court;
Step 3: Suggest to the Court that comments should be allowed--but only after the Greater Boston Interfaith Organization put pressure on her to allow those public comments;
Step 4: Revise the deal in a few minor ways, respond to the public comments, and present them to the Court without allowing a chance for rebuttal from other interested parties;
Step 5: Oppose intervention by other parties in the court case.

But it gets worse still.  Just read this paragraph from page 46 of the AG's filing [emphasis added]:

Several comments suggest that the comprehensive price caps do not do enough to reduce the gap between Partners current reimbursement rates and the prices of other health care providers, that is, to combat the “provider price disparity” that has been well documented in Massachusetts (initially by the Attorney General’s Office). This is not an appropriate lens through which to evaluate this remedy. These comments appear to suggest that the UPGC [unit price growth cap, which limits PHS price increase to the lower of general or medical inflation] should cut back on the pricing advantage that they attribute to Partners’ current market position. But the remedies in the proposed Consent Judgment cannot be evaluated compared to claims that the Attorney General did not bring. Rather, the measure of the UPGC is whether it addresses the harms identified in the Complaint. 

This paragraph boggles the mind.  The AG spent several years documenting the fact that Partners' market power is responsible for the substantially higher rates it receives from insurers for the same work done by other academic medical centers, community hospitals, and physicians.  Indeed, she concluded that this disparity has been one of key drivers of health care cost increases in Massachusetts.  She does not suggest in her filing that the UPGC will reduce the disparity--and indeed it will not.* Instead, she argues that this topic is irrelevant to the complaint she initially filed against PHS.

The obvious question is why she never included this aspect of Partners' market power in her complaint and why she did not seek a remedy to it. 

Oh, here's the answer she offers (on page 30 and elsewhere):

If we don't like this deal she has signed, others are free to file an anti-trust lawsuit against PHS.

I thought that was her job.

* Remember this summary on Commonhealth [emphasis added]:

But will the deal close the gap between what Brigham and Women’s is paid for that MRI as compared to Beverly Hospital? Only if the low-cost hospitals get some significant rate increases.

If Partners prices rise 2 percent a year, and prices for similar Boston hospitals go up 3.6 percent, the gaps narrow, Boros says.

“Specifically, our 2012 data shows that Brigham and Women’s prices are 24 to 33 percent higher than Beth Israel Deaconess Medical Center and 26 to 59 percent higher than Tufts Medical Center. After six years, these gaps close to 13 to 21 percent higher for BIDMC and 15 to 45 percent higher for Tufts,” Boros said.

Of course that assumes insurers in Massachusetts would offer lower-cost hospitals rate increases that are almost twice as high as Partners, something they have never done before.

And they shouldn’t, says Nancy Kane, who’s been studying hospital financing in Massachusetts for more than 30 years and teaches at the Harvard School of Public Health.

“It doesn’t make the whole more affordable if everybody’s trying to grow their rates,” Kane said. “[The AG's deal] doesn’t address the larger issue of affordability. It’s sort of a Band-Aid at this point.”

Kane says if the state wants real competition among hospitals, it would have to either set rates or force Partners to sell off some of its hospitals.

1 comment:

Anonymous said...

That's deeply disappointing behavior from an official who is supposed to look out for the public trust. Bringing an anti-trust lawsuit would require deep pockets. In the meantime, while the suit winds itself through the courts - a process that could take months to years - Partners can continue to play its dominant provider card to rake in the money from rates that are far in excess of what they should be (for no demonstrable difference in quality of clinical outcomes).