Deal would avoid hospital pricing ballot fight

Avoids redistribution; calls on commission for long-term solution


A DEAL BROKERED by Beacon Hill leaders between labor and the hospital industry to avert a contentious hospital pricing disparity ballot question this fall would reenergize a special commission examining health care costs and direct $120 million over five years in financial relief to hospitals across the state.

The tentative agreement announced Wednesday by Gov. Charlie Baker, House Speaker Robert DeLeo, and Senate President Stanley Rosenberg comes after closed-door talks between stakeholders and government leaders intensified in recent weeks in an attempt to avoid a ballot fight.

Health care union officials who signed off on the agreement said that they would withdraw the ballot question if the alternative plan, which was being polled through committee Wednesday night, clears the Legislature and is signed into law by the governor.

“Working across the aisle with legislative leaders to work out a consensus agreement is important to addressing the issues raised by the proposed ballot question and I am thankful for the cooperation of the Speaker and Senate President,” Baker said in a statement. “I am pleased that we were able to reach these solutions together and I look forward to the Legislature taking up this matter.”

The ballot campaign being led by 1199SEIU United Healthcare Workers East would set a floor and ceiling on negotiated prices between private insurers and health care providers in an attempt to address persistent variation in pricing for similar services.

Proponents have argued the measure would lower payments to high cost providers, mainly Partners HealthCare, by $463 million and put $196 million back into community hospitals and hospitals that serve a large volume of low-income patients on Medicaid and Medicare. Partners has said the measure could cost thousands of jobs.

Instead of trying to redistribute money within the industry, the agreement reached Wednesday would authorize $45 million over the next five years from existing assessments to be distributed to hospitals with relative prices below 120 percent of the statewide median.

The hospital funding would be redirected away from the Center for Health Information and Analysis, starting with $5 million in fiscal 2017 and $10 million a year thereafter.

Secretary of Health and Human Services Marylou Sudders would also be authorized under the bill to expend up to $15 million a year in additional hospital reimbursement rates through MassHealth. That would come on top of a new $250 million assessment Baker has already proposed to levy on hospitals that he says would be returned through higher Medicaid rates, helping hospitals that serve larger low-income population more than others.

“This agreement is the first substantive step toward leveling the Massachusetts healthcare playing field, providing $120 million in new financial relief to hospitals across the Commonwealth. In addition, the Commission established by this agreement will tackle the issue of inequity in healthcare reimbursement with a firm timeline for comprehensive policy solutions to be developed by a broad range of stakeholders – something that advocates for a quality, affordable and fair healthcare system have been pushing for repeatedly during the past decade,” 1199 SEIU Executive Vice President Tyrek Lee said in a statement.

The commission, which was established under a 2012 health care cost control law as an 18-member panel to review variation in price among providers, has never convened, according to Health Care Financing Committee Co-Chair Rep. Jeffrey Sanchez.

The agreement calls for Sanchez and his Senate co-chair Sen. James Welch to be added to the commission as co-chairs.

“It gets us into the room where we’re going to talk about all these details that all these organizations and individuals have been talking about for awhile now,” Sanchez told the News Service. “In looking at price, we’re going to have to look at services like research and care coordination and it will be an exercise for us to try to establish priorities for ourselves because at the end of the day the language allows us to try to explore the issue of price variation.”

Sanchez also said the financial piece of the agreement will provide “immediate relief” to some struggling hospitals while leaders work to address the broader issues associated with price variation.

Partners HealthCare, in a statement, endorsed the agreement.

“Their approach offers an effective way to provide needed assistance, especially to those community hospitals that serve disproportionately high numbers of low income patients here in Massachusetts.  The agreement also offers, through the proposed Commission, a credible means to more thoroughly identify and better understand the many factors that contribute to variation in prices among hospitals here in Massachusetts and across the nation,” the hospital network said.

Sanchez began polling the agreed upon language through the Health Care Financing Committee on Wednesday night, substituting the terms of the deal for legislation filed by Sen. Benjamin Downing that looked at similar mechanisms to the ballot question to address price differences.

“Hopefully we can take it up in the next couple of days. We’re hoping as soon as possible,” Sanchez said. The House meets in an informal session on Thursday, and the committee poll closes at noon.

Another aspect of the agreement not mentioned by the governor or legislative leaders in their description of the agreement is a “strategic alliance” between Partners HealthCare and 1199 SEIU United Healthcare Workers East that could impact the landscape of unionized healthcare workers down the line.

“As part of our strategic alliance, we will continue to work together to facilitate the delivery of high quality health care, support fair pay, and good jobs. We have always respected the rights of our workers to choose whether to be represented by a union, or not. Future organizing efforts will be designed to ensure the right of workers to make free and fully informed decisions on this question through the process of a secret ballot election. This is fully consistent with the respect we have always had for our workers, and with our core values,” Partners and the union said in a joint statement.

1199 SEIU officials would not say whether there were specific hospitals within the Partners network they were hoping to unionize.

Both DeLeo and Rosenberg said they hoped the deal would avoid a “costly” ballot question this fall.

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Matt Murphy

State House News Service
“It is my hope that this plan will avert a costly and divisive ballot initiative and lend assistance to our community hospitals, which serve our most underserved residents,” DeLeo said in a statement. “I look forward to the work of the commission.”

Rosenberg said, “This framework establishes a path to a long term solution on the issue of price variation that will protect consumers, provide stability in the healthcare marketplace, and help put all of our hospitals on solid financial footing.”