There are new concerns about an agreement Attorney General Martha Coakley negotiated to try and control the prices and market power of Partners HealthCare. The implication, from a commission created to help reduce health spending, is that the deal does not go far enough.
“Without lasting change to the market structures,” the Health Policy Commission (HPC) writes in comments to be filed in court, “price caps may not be effective in keeping costs down.”
The commission dug in on a portion of the deal Coakley reached with Partners — the part that says network prices could not rise faster than inflation for six and a half years.
“Prices themselves, they are important,” said commission chairman Stuart Altman, “but they’re not the end of the game.”
To explain why, picture a colleague, neighbor, maybe your grandmother — someone who’s had hip replacement surgery. Now picture two hospitals.
“In one place,” said Altman, “a hip costs $10,000 to replace. In another, it’s $15,000.”
Under Coakley’s deal, prices at each of these Partners hospitals would rise slowly. But there’s nothing to keep Partners from sending more patients to the $15,000 facility. If more patients have hips replaced at the higher-cost hospital, then total health care costs would go up, even if prices don’t.
“Total medical expenditures, when we finally figure it out, is going to up by a lot, but yet the price increases were fine,” Altman said.
Coakley would have someone monitoring Partners, who could, in theory, intervene if a significant number of patients shift from lower- to higher-cost hospitals. But that monitor would only have access to spending for patients covered by a global budget, which Partners says is about 25 percent of its business.