Encouraging health insurers to offer coverage through “limited networks” of hospitals and doctors could be an immediate way to cut health care costs, a panel of health experts told state officials Friday.
As the Patrick administrations seeks short-term health care savings, the heads of prominent Massachusetts hospitals and insurers said limited networks would enable insurers to steer consumers to low-cost, high-quality hospitals and avoid facilities that charge high prices for medical services with little difference in outcome.
“Tomorrow we could start limited networks,” said Tufts Medical Center CEO Ellen Zane. “It basically requires that the market be incentivized to do it.”
During a Thursday panel, Winchester Hospital CEO Dale Lodge said establishing and incentivizing limited networks could result in immediate savings.
Zane and Lodge are among an increasingly vocal pool of health industry officials who have expressed frustration at high-cost hospitals who command greater reimbursements rates for the care they provide without producing better results.
“We have a very unlevel field here that doesn’t correlate to quality and it doesn’t correlate to outcomes and it doesn’t correlate to acuity,” she said. “The lowest-cost providers continue to be starved.”
Zane said without a fix to the reimbursement disparity, efforts to establish a system of “global payments” – shared payments for groups of doctors aimed at lowering the total cost of patients’ care and discouraging unnecessary or wasteful procedures – would be doomed.
In three days of hearings organized by the state Division of Health Care Finance and Policy (DHCFP) and Attorney General Martha Coakley’s office, Paul Levy, the head of Beth Israel Deaconess Medical Center; Dianne Anderson, the head of Lawrence General Hospital; Zane; and Lodge, the Winchester Hospital head, all voiced concerns about how providers like Massachusetts General Hospital and Brigham and Women’s – the cornerstones of Partners HealthCare’s hospital system – receive reimbursements for care that aren’t connected to quality.
Partners officials defended their practices during the hearings, disputing a report by Attorney General Martha Coakley that found they relied on their market leverage to drive up prices and arguing that they also provide Medicare and Medicaid services at far lower rates than they actually cost.
The Patrick administration’s health policy chief, David Morales, who presided over the three days of hearings, held at UMass-Boston, said if health costs aren’t controlled, they will overrun the budget in as little as four years. Citing one expert who testified at the hearings, Morales said health care costs will consume 34 percent of the state’s wage base – up from 7 percent now – within a decade.
“There’s a tremendous sense of urgency that something has to get done on health care costs,” he told the News Service. Morales said he is crafting a report to be released “in the next few weeks” that he hopes will become a blueprint for major changes aimed at controlling health costs in the long- and short-term. The report, he said, would include “very specific recommendations.”
Morales said he wasn’t surprised at the frustration about reimbursements that pitted hospitals with lower rates against their wealthier peers. He was, however, surprised at the candid acknowledgement that some hospitals charge rates that aren’t connected to the quality of their service.
“As consumers, we’ve grown accustomed to a marketplace where we think the more we pay correlates to the quality of the product,” he said.
Morales said health insurers have the ability to form limited networks now but see little demand for it. A proposal the governor has filed with lawmakers, he added, would empower the Division of Insurance to rewrite regulations to encourage more limited network products.
Asked whether he expected substantial changes to the health care system this year, Morales said, “I don’t know. I’m not a soothsayer.”
“As part of my economics background,” he added, “if we don’t start attacking the economic trend we’re seeing … we’ve got a serious problem in about four years.”
On Friday, Partners CEO Gary Gottlieb, who sat on the panel with Zane, wondered whether limited networks would lack key services for patients.
“How is it that they’re paid for if fragments of services are not part of the networks that are offering them?” he asked. “What’s the comprehensiveness of services that are necessary and available?”
When Dolores Mitchell, executive director of the state employee Group Insurance Commission, said limited networks would only limit providers, not services, Gottlieb countered that a “skewed” interest in high-tech services would make limited networks difficult to achieve.
Mitchell also noted, facetiously, that limited networks might only attract “people who are 12 years old and healthy and run 100 miles a week,” driving up costs for patients in broader insurance networks.
Limited networks have also proven unpopular in Eastern Massachusetts, Tufts Health Plan CEO James Roosevelt told state officials Thursday, at the second of the three hearings.
All of the talks were heavy with political subtext. Gov. Deval Patrick, whose administration has sought credit for implementing the state’s health care reform laws leading to a 97 percent rate of insurance among state residents, is fending off an election-year challenge from a Republican former health insurance executive and the unenrolled state treasurer who has blasted the health law as unaffordable and poorly managed.
“Unfortunately, we’re also in an election year,” Mitchell noted. “Let’s face it that makes life much more complicated.”
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Encouraging health insurers to offer coverage through “limited networks” of hospitals and doctors could be an immediate way to cut health care costs, a panel of health experts told state officials Friday.
As the Patrick administrations seeks short-term health care savings, the heads of prominent Massachusetts hospitals and insurers said limited networks would enable insurers to steer consumers to low-cost, high-quality hospitals and avoid facilities that charge high prices for medical services with little difference in outcome.
“Tomorrow we could start limited networks,” said Tufts Medical Center CEO Ellen Zane. “It basically requires that the market be incentivized to do it.”
During a Thursday panel, Winchester Hospital CEO Dale Lodge said establishing and incentivizing limited networks could result in immediate savings.
Zane and Lodge are among an increasingly vocal pool of health industry officials who have expressed frustration at high-cost hospitals who command greater reimbursements rates for the care they provide without producing better results.
“We have a very unlevel field here that doesn’t correlate to quality and it doesn’t correlate to outcomes and it doesn’t correlate to acuity,” she said. “The lowest-cost providers continue to be starved.”
Zane said without a fix to the reimbursement disparity, efforts to establish a system of “global payments” – shared payments for groups of doctors aimed at lowering the total cost of patients’ care and discouraging unnecessary or wasteful procedures – would be doomed.
In three days of hearings organized by the state Division of Health Care Finance and Policy (DHCFP) and Attorney General Martha Coakley’s office, Paul Levy, the head of Beth Israel Deaconess Medical Center; Dianne Anderson, the head of Lawrence General Hospital; Zane; and Lodge, the Winchester Hospital head, all voiced concerns about how providers like Massachusetts General Hospital and Brigham and Women’s – the cornerstones of Partners HealthCare’s hospital system – receive reimbursements for care that aren’t connected to quality.
Partners officials defended their practices during the hearings, disputing a report by Attorney General Martha Coakley that found they relied on their market leverage to drive up prices and arguing that they also provide Medicare and Medicaid services at far lower rates than they actually cost.
The Patrick administration’s health policy chief, David Morales, who presided over the three days of hearings, held at UMass-Boston, said if health costs aren’t controlled, they will overrun the budget in as little as four years. Citing one expert who testified at the hearings, Morales said health care costs will consume 34 percent of the state’s wage base – up from 7 percent now – within a decade.
“There’s a tremendous sense of urgency that something has to get done on health care costs,” he told the News Service. Morales said he is crafting a report to be released “in the next few weeks” that he hopes will become a blueprint for major changes aimed at controlling health costs in the long- and short-term. The report, he said, would include “very specific recommendations.”
Morales said he wasn’t surprised at the frustration about reimbursements that pitted hospitals with lower rates against their wealthier peers. He was, however, surprised at the candid acknowledgement that some hospitals charge rates that aren’t connected to the quality of their service.
“As consumers, we’ve grown accustomed to a marketplace where we think the more we pay correlates to the quality of the product,” he said.
Morales said health insurers have the ability to form limited networks now but see little demand for it. A proposal the governor has filed with lawmakers, he added, would empower the Division of Insurance to rewrite regulations to encourage more limited network products.
Asked whether he expected substantial changes to the health care system this year, Morales said, “I don’t know. I’m not a soothsayer.”
“As part of my economics background,” he added, “if we don’t start attacking the economic trend we’re seeing … we’ve got a serious problem in about four years.”
On Friday, Partners CEO Gary Gottlieb, who sat on the panel with Zane, wondered whether limited networks would lack key services for patients.
“How is it that they’re paid for if fragments of services are not part of the networks that are offering them?” he asked. “What’s the comprehensiveness of services that are necessary and available?”
When Dolores Mitchell, executive director of the state employee Group Insurance Commission, said limited networks would only limit providers, not services, Gottlieb countered that a “skewed” interest in high-tech services would make limited networks difficult to achieve.
Mitchell also noted, facetiously, that limited networks might only attract “people who are 12 years old and healthy and run 100 miles a week,” driving up costs for patients in broader insurance networks.
Limited networks have also proven unpopular in Eastern Massachusetts, Tufts Health Plan CEO James Roosevelt told state officials Thursday, at the second of the three hearings.
All of the talks were heavy with political subtext. Gov. Deval Patrick, whose administration has sought credit for implementing the state’s health care reform laws leading to a 97 percent rate of insurance among state residents, is fending off an election-year challenge from a Republican former health insurance executive and the unenrolled state treasurer who has blasted the health law as unaffordable and poorly managed.
“Unfortunately, we’re also in an election year,” Mitchell noted. “Let’s face it that makes life much more complicated.”
