The California Health Care Foundation released a report a few weeks back showing that medical groups are losing their clout to hospitals. Meanwhile, over the last few years hospitals have been exercising their new found clout against the plans, and now it appears that the end-payers (such as CalPERS) are not going to take it lying down. Matt Quinn wrote about the battle between CalPERS and Sutter (the big N. Cal Chain) in TCHB last week. This week legislation was introduced in the California assembly to stop provider systems from being allowed to force health plans to contract with every hospital in their network. Whether this meddling in the market will stand up to further legal scrutiny is open to question, or at least it should put some fear into WalMart (or anyone else who uses market clout to get a better deal)!

By the end of the week it appears that CalPERS is stepping back from the brink, but the market power of hospitals is only increasing as we head into the baby-boom golden age in the next decade, so don’t expect this story to be over too soon.