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Lessons From Massachusetts’ Failed Healthcare Cost Experiment

Massachusetts passed a massive medical cost control bill in 2012, a “Hail Mary” effort to make health-care more affordable in the nation’s most expensive medical market. The problems of the Massachusetts’ law offer invaluable lessons for the nation’s health-care struggles.

Driven in part by a Boston Globe investigation that exposed the likely collusion of the Partners Healthcare hospital system (including several Harvard Medical School teaching hospitals) with Blue Cross/Blue Shield, the largest healthcare insurer in the state, the law marked the biggest health reform since Romneycare in 2006. While most agree Massachusetts needed cost controls, there’s no evidence that the 2012 law has accomplished its goal—and these same failed policies have been folded into the national Affordable Care Act.

Romneycare, Massachusetts’ universal health-care law, already lacked effective rules to control the rapid growth of state medical costs. That, paired with the Boston Globe’s exposure of the likely collusion between Partners Healthcare, the largest hospital system in New England, and Blue Cross Blue Shield to raise health care payments to hospitals and doctors by as much as 75 percent, led to passage of a hefty, 349-page cost-control law in 2012. The legislation included a dizzying number of committees, an uncoordinated “cost containment” process, and dubious quality-of-care policies, like “pay-for-performance,” a program that pays doctors bonuses for meeting certain quality standards, like measuring blood pressure. These incentives might make sense in economic theory, but have failed repeatedly in well controlled studies. They’ve even created perverse enticements, such as some doctors avoiding sicker patients. The cost control law also encouraged widespread use of expensive electronic health records, even though there’s no evidence that they save any money.

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On the Ethics of Accountable Care Research

  • Is it ethical for health policy researchers to claim that a Medicare ACO reduced “spending” by 2 percent if the reduction was not statistically significant?
  • Is it ethical for them to do so if they made no effort to measure the cost to the ACO of generating the alleged 2 percent savings nor the cost to Medicare of giving half the savings to the ACO?
  • Does it matter that the researchers work for the flagship hospital within the ACO that was the subject of their study?
  • Does it matter that the ACO and the flagship hospital are part of a huge hospital-clinic chain that claims its numerous acquisitions over the last quarter-century constitute not mere empire-building but rather “clinical integration” that will lower costs, and the paper lends credence to that argument? 
  • Is it ethical for editors to publish such a paper? Is it ethical to do so with a title on the cover that shouts, “How one ACO bent the cost curve”?

These questions were raised by the publication of a paper  by John Hsu et al. about the Pioneer ACO run by Partners HealthCare System, a large Boston hospital-clinic chain, in the May 2017 edition of Health Affairs. Of the eight authors of the paper, all but two teach at Harvard Medical School and all but two are employed by Massachusetts General Hospital (MGH), Partners’ flagship hospital and Harvard’s largest teaching hospital. [1]

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Rich hospital buys poor Medicaid Health plan. Hmm

Partners, the Boston behemoth that rivals California’s Sutter Health for its ability to impose its pricing will on the local Blues plans, has bought a struggling Medicaid plan, Neighborhood Health Plan (NHP). Actually “bought” is a strong word, as it’s like one of those deals when you “buy” someone’s car by taking over the payments they can’t meet. The fascinating part is that Partners has agreed to fund 50 community clinics that provide most of the care for the Medicaid crowd that NHP insures. So is Partners’ goal to ramp those clinics up to its standard level of pricing and charge Medicaid–i.e. the state & Feds-more for the privilege? Or is the goal (as Jeff Goldsmith suggested more generally yesterday)  to import the knowledge those clinics have and get the rest of the system to run at their low cost? You be the judge…

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