Michael Moore had it right: Get the profit out of health care insurance. The following story was basically off my screen until I found it, and surprisingly, market forces continue to rack up more cash by gaming the system (any system). This time insurance bows to the big health care providers. The Boston Globe uncovered this:
"A healthcare system badly out of balance,” Elite hospitals are paid much more for care that is often no better than average. It is the best kept secret in Massachusetts medicine.
.... Call it the best-kept secret in Massachusetts medicine: Health insurance companies pay a handful of hospitals far more for the same work even when there is no evidence that the higher-priced care produces healthier results.
This payment pattern has become a driving force in the state's galloping healthcare costs, and it raises hard questions about why certain hospitals and physicians receive premium pay for care that is no better than that of their competitors. Until now, the growing pay gap has not been subject to public scrutiny because contracts between insurers and hospitals typically include confidentiality agreements. But dramatic payment gaps have emerged over the last decade as hospitals pushed, with varying levels of success, to offset federal budget cuts by boosting their income from insurance companies, health executives say. The resulting wide range of payments for the same services reflects a healthcare system in which deregulation and lax government oversight have allowed the hospitals with the most clout to extract big increases from insurers while everyone else falls behind....
Health insurance premiums paid by the average Massachusetts family have jumped 78 percent since 2000, and a significant portion of the rise has been driven by hefty insurance payment increases to dominant providers, who use the extra income to install the latest technology and expand, often on rivals' turf… officials say that they steadily lose doctors to those that can pay more, and that they constantly struggle to keep pace with advances in costly medical technology.
The hospitals that are paid at the highest rates all share one trait: They have the bargaining clout to demand higher insurance payments. Often, that clout is based on a powerful brand name and elite reputation....
The other source of bargaining power is geographical isolation. No company has thrived more in this sharply competitive world than Partners HealthCare, a company formed in 1994 to fight back against what its founders saw as the stinginess and lopsided power of insurance companies, which had brought many hospitals to their knees. By bringing together two of the most prestigious hospitals in Boston - the Brigham and Mass. General - Partners became what some called the "800-pound gorilla" of Massachusetts healthcare, able to bend insurers to its will.
Partners' dominance became clear in 2000, when executives of Tufts Health Plan had the temerity to refuse Partners' demand for a substantial rate increase. Partners countered by declaring it would no longer accept Tufts insurance at its hospitals. Within days, as thousands of Tufts customers threatened to change insurance rather than lose the right to treatment at the two famous hospitals, Tufts gave in to Partners' demands. Since then, Partners has negotiated one big pay increase after another from insurance companies fearful of a similar humiliation.
"Some are able to spend more than others," said Jack Connors, Partners' longtime chairman of the board. "It's our fortune that we're probably in the lead on those investments. And several hospitals aren't able to keep that pace. And that's what I, as a businessman, call market forces, if you will."
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