While the Democratic party “commentariat” has had afield day with the AG’s campaign for US Senate, a funny thing happened. Ten days after the election, her office released an intriguing Investigation that showed nuance well beyond the campaign talking points on why health care is so expensive.
A. Prices paid by health insurance companies to hospitals and physician groups vary significantly within the same geographic area and amongst providers offering similar levels of service.
B. Price variations are not correlated to (1) quality of care, (2) the sickness or complexity of the population being served, (3) the extent to which a provider is responsible for caring for a large portion of patients on Medicare or Medicaid, or (4) whether a provider is an academic teaching or research facility. Moreover, (5) price variations are not adequately explained by differences in hospital costs of delivering similar services at similar facilities.
C. Price variations are correlated to market leverage…
E. Price increases, not increases in utilization, caused most of the increases in health care costs during the past few years in Massachusetts.
F. The commercial health care marketplace has been distorted by contracting practices that reinforce and perpetuate disparities in pricing.
Oh, yeah. Almost forgot “D,” which I found most intriguing. The AG also found limits on the benefit of reforms like “global payments,” all the rage these days in policy circles.
D. Variation in total medical expenses on a per member per month basis is not correlated to the methodology used to pay for health care, with total medical expenses sometimes higher for globally paid providers than for providers paid on a fee-for-service basis.
Coakley’s office is to issue the final report on March 16th, the day of hearings on health care cost containment. Looking forward to that if this is any indication of the seriousness of her direction on the issue.