Health care pricing regulation gains backing

Slowly but surely the case is being made for some form of state intervention in health care pricing.

Attorney General Maura Healey broached the idea in October during a series of hearings hosted by the state’s Health Policy Commission on health care cost trends. She noted that big disparities in prices paid to some health care providers continue to hinder efforts to rein in costs and said the state should “consider forms of directly regulating the level of variation in provider prices and/or medical spending.”

In January, the Health Policy Commission itself said policymakers need to address the disparities in health care pricing when there is no measureable difference in quality, complexity, or other indicators. The commission said it planned to make recommendations to the Legislature on a course of action within six months.

Now four business and trade groups are calling on the state to act. Associated Industries of Massachusetts, the Retailers Association of Massachusetts, the National Federation of Independent Business, and the Massachusetts Association of Health Plans said the price disparities are well documented and need to be addressed. Rick Lord, the president of AIM, also sits on the Health Policy Commission.

A number of initiatives are already underway to indirectly reduce the impact of hospital pricing disparities, but momentum seems to be building for more direct action. Many are pointing to Maryland, which sets the prices hospitals can charge for their services. While state price regulation in Massachusetts would be controversial, Stuart Altman, the chairman of the board of the Health Policy Commission, says Maryland has shown price regulation can be done without undercutting the quality of care.

“Johns Hopkins is located in Maryland,” he said. “So just because you have regulation doesn’t mean that it destroys the quality of the health care system.”

Some aren’t waiting for policymakers to figure out what to do about pricing disparities among hospital providers. 1199SEIU is pushing a ballot question this fall that would allow voters to set hospital prices. The question would require insurers to pay hospital providers no more than 20 percent above or 10 percent below the average cost of a service.The ballot question could cost Partners HealthCare, which owns Massachusetts General and Brigham and Women’s hospitals and is the chief beneficiary of the disparity in pricing, an estimated $439 million.

While policymakers are laying the groundwork for some sort of state intervention in the health care marketplace, the position of one key player is unknown. Gov. Charlie Baker shocked many at the health cost trend hearings in October when he downplayed the impact of health care costs in Massachusetts, suggesting that prices weren’t that high when adjusted for income levels in the state.

Marylou Sudders, the governor’s secretary of health and human services and a member of the Health Policy Commission, said after the agency’s meeting in January that she’d have to get back to a reporter on whether the Baker administration would support government intervention to eliminate hospital pricing disparities. She hasn’t gotten back yet.




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