Mass. attorney general suggests temporary price restrictions
Areport from the Massachusetts attorney general’s office recommends temporary price restrictions on providers’ charges for comparable medical services, noting that total medical spending in the state is greater for individuals with higher incomes.
The second annual report states that the shift to global payments—where physicians receive a per-patient amount—will not control rising healthcare costs unless other issues, such as price disparities and changes in how consumers make purchasing decisions, are addressed. It gathered data from six health insurers and 16 providers in Massachusetts. The global payments system is the “predominant” non-fee-for-service payment model used in Massachusetts, according to the report.
“The continued increase in healthcare costs is one of the most important issues confronting families and businesses,” Massachusetts Attor- ney General Martha Coakley said in a news release. “Our investigation shows that a move to global payments is not the panacea to controlling costs without first addressing provider price disparities that are not related to the quality or complexity of the services being provided.”
There is a 170% difference in the payments made by health insurers to the lowest-paid hospital and the highest-paid hospital in each of the insurers’ networks, according to the report.
Two Partners HealthCare hospitals, 19-bed Nantucket (Mass.) Cottage Hospital and 25bed Martha’s Vineyard Hospital, Oak Bluffs, and 396-bed Children’s Hospital Boston were cited as the three hospitals receiving the highest payments.
“Innovative insurance products—tiered and limited network products—show promise in promoting value-based purchasing, but the competitive benefits of those products cannot counteract the historic effects of price disparities that continue to threaten the financial viability of many excellent, efficient healthcare providers,” the report’s authors wrote.
The report also said providers that receive global payments do not “consistently” have lower total medical expenses. It also found that tiered and limited network products increased consumer engagement.
The report offers five other recommendations: promoting tiered and limited network products to increase value-based purchasing decisions; encouraging consumers to select a primary-care provider; promoting coordination of patient care through primary-care providers; taking steps to improve the use of the payer claims database; and developing additional regulatory and standards for providers involved in the management of risk for insured and self-insured patients.