health cost trend hearings

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Tufts Chief Ellen Zane: Start From A ‘Common Fee Schedule’ For Health Care

Outgoing Tufts Medical Center chief Ellen Zane proposed this intriguing idea yesterday for a potential fix to the huge variation in prices between hospitals, one of the drivers of ever-rising health costs:

“I fundamentally beieve a real fix in this market is to have a common fee schedule across all health plans. Not that we’re all rate- setting. We’re not talking about intense rate-setting. But that fee schedule should be moderated with inflators in private negotiations, not state-run negotiations, private negotiations.

So perhaps the hand of the state could come in and develop a foundation that’s transparent, that we all know the basis of, that isn’t different from health plan to health plan. And then in our private negotiations [we talk about reasons to raise prices from baseline] — whether it’s the fact hat we have a high Medicaid population or a high case mix or a teaching mission — all of which are legitimate variations in price.

So rather than talking about what’s fair and not fair, we ought to do it more scientifically, and we ought to do it more transparently, so that we have a common understanding that’s irrefutable and then we inflate it based on who we are, what our quality is, what our mission is and so forth. And there’s been a resistance to even thinking about that and I frankly don’t know why.”

Readers, why do you think? And how do you like this idea?