Even if you don’t follow sports, you surely know about the Super Bowl. And even if you don’t follow the health care business, you may want to note a judge’s bombshell decision that has just hit the sector in Massachusetts. It may affect your hospital bill someday.
The news: A superior court judge has rejected a deal that would have let the state’s biggest hospital system — Partners HealthCare, which includes academic giants like Massachusetts General Hospital and Brigham and Women’s Hospital — expand.
Partners had been seeking to acquire at least three more hospitals, and had agreed to price caps and other limits that would hold for six-and-a-half to 10 years. But Suffolk Superior Court Judge Janet Sanders concluded that letting Partners expand would not be in the public interest; it “would cement Partners’ already strong position in the health care market and give it the ability, because of this market muscle, to exact higher prices.”
If you get too big, as Partners has become, it sort of destroys the concept of a competitive marketplace.
To sum up the last decade of Massachusetts health care history in one paragraph: First, the state passed groundbreaking health care reform that presaged Obamacare. But though that reform meant that virtually everyone had health insurance, it didn’t “crack the code” of health care costs, which kept rising. The state created a Health Policy Commission, which was meant to keep an eye on costs among other things. When Partners, which the Boston Globe reports already has $11 billion in revenue, sought to expand, the commission concluded that the expansion would increase health care spending in the state by $39 million to $49 million a year. Partners opponents pushed back, and now the judge has sided with them.
Dominant hospital systems exist in areas around the country; the New York Times has written repeatedly about their tendency to lead to higher costs for patients, including here — 2 Hospital Networks Agree To Merge, Raising Specter of Costlier Care — and here: The Risks of Hospital Mergers. The main risk: The market power of big hospital systems means they can negotiate for higher prices from insurers, prices that tend to be passed down to consumers.
It remains to be seen whether this is an important new national precedent. But we cannot help but note that Massachusetts has certainly set important health care precedents in the past. WBUR’s Martha Bebinger offers a rich, full report of the judge’s landmark decision here, including this memorable quote from Stuart Altman, chair of the Health Policy Commission:
“If we’re going to have the cost of health care grow at a more normal rate, we need to have enough competition in the marketplace so that no part of the system can dictate prices,” said Stuart Altman, chair of the Health Policy Commission. “If you get too big, as Partners has become, it sort of destroys the concept of a competitive marketplace.”
Judge Sanders also wrote in her opinion that the deal would be too difficult to enforce, and offered some examples, Martha Bebinger reports: Continue reading