Ballot question spurs unusual hospital alliance

Lawrence Mayor Daniel Rivera came to the State House on Tuesday to testify in support of a ballot question that would revamp the way hospitals are compensated and steer an extra $5.8 million to his city’s largest employer, Lawrence General Hospital.

But Dianne Anderson, the president and CEO of Lawrence General, doesn’t feel the same way. She sits on the board of the Massachusetts Hospital Association, which has unanimously voted twice to oppose the ballot question and lead the fight against it.

The disconnect between Rivera and Anderson is jarring, but perhaps not that unusual. All but one of the hospital association’s board members head institutions that would benefit financially from the ballot question, but nevertheless they have formed a united front against it. Their reasons vary. Some are wary of government price regulation; others don’t think a ballot question is the best way to set health care policy. Whatever their motivation, the united front benefits Partners HealthCare, the one association member who would take a big hit if the ballot question becomes law.

The ballot question is being pushed by the Service Employees International Union, which represents health care workers. The question attempts to address a disparity between what Partners’ flagship teaching hospitals are paid for services and what most everyone else in the business gets. The price differential has been documented in several studies conducted by Attorney General Maura Healey and the state’s Health Policy Commission.

The SEIU initiative would require commercial health insurers to pay hospitals no more than 20 percent above or 10 percent less than the “carrier-specific average relative price” for a service. According to union estimates, the question would suck $440 million out of Partners and funnel most of that money to hospitals across the state.

Lowell General Hospital would receive $27 million. Cambridge Health Alliance would get $22 million. CareGroup, which owns Beth Israel Deaconess and Mount Auburn Hospital, would pick up a total of $17 million. Baystate Health and Lahey Health would each receive $10 million, New England Baptist would get $7 million, Boston Medical Center would recover nearly $4 million, and Tufts Medical Center nearly $3 million.

All of these institutions have officials that serve on the board of the Massachusetts Hospital Association. The only hospital system not on board is Steward Health Care, which withdrew from the hospital association in late 2011 and now supports the ballot question.

Timothy Gens, the executive vice president and general counsel of the hospital association, declined to go into detail about the

group’s deliberations on the ballot question or even say who is on the board. (A subsequent check of the group’s website, however, showed the board members are listed there.)

A person familiar with the board’s discussions said there is tension within the body between those who want to simply oppose the ballot question and those who want to address hospital pricing differentials through separate legislation. A hospital association subcommittee headed by Michael Widmer, the former head of the Massachusetts Taxpayers Foundation, is looking into ways to address the pricing differentials.

A source familiar with the board’s discussions said Partners wields enormous power within the association, since it supplies 20 to 25 percent of its revenue. The source said the hospital association has pledged $14 million to the ballot question fight, with $12 million coming from Partners and $2 million from the association’s other members. The Rasky Baerlein firm is being enlisted to run the ballot campaign, the source said.

Richard Copp, a spokesman for Partners, said he could not confirm the money being raised for the ballot fight or the hiring of Rasky Baerlein.

Anderson, the CEO of Lawrence General, did not address the hospital’s opposition to the ballot question, but said in a statement that she has been vocal about the “unfair disparities in payment for similar medical services.” She added: “According to the Center for Health Information and Analysis, Lawrence General is one of the lowest paid in the state for services that garner much larger payments at other hospitals in Massachusetts. We must find a way to address the problem and achieve better payment parity among hospitals.”

Tyrek Lee Sr., executive vice president of 1199SEIU, issued a statement saying the hospital payment system is broken in Massachusetts and the ballot question is an attempt to fix it.

“We hope executives at these hospitals can recognize the Campaign for Fair Care is aiming for a fix and reforms that not only benefit their institutions, but patients across the state,” he said.