Ballot question could spur lawmakers to tackle health price variations

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US Dollar currency with health-care concept

STATE HOUSE, BOSTON, MARCH 8, 2016…..Despite some concerns with a proposed ballot question to regulate health care provider prices, pressure began to mount on lawmakers Tuesday from a collection of hospitals, patient advocates and workers to take action this year to address hospital price variations that are squeezing community hospitals.

The ballot question being pushed by 1199 SEIU United Healthcare Workers East would set a floor and ceiling on negotiated prices between private insurers and health services providers. Dozens of union members wearing purple and gold T-shirts turned out for a hearing Tuesday at the State House.

While union leaders say they are willing to work with the Legislature on the details of the plan, 1199 SEIU Executive Vice President Tyrek Lee made clear during a hearing that organizers are not bluffing about using the ballot to achieve their goals.

“Our ballot initiative and legislation is just one example of the fix. This is a serious problem that we can’t put any more Band-Aids on,” Lee told the Health Care Financing Committee, adding, “If we can’t figure it out, we are 100 percent prepared to go to the ballot in November.”

Rep. Jeffrey Sanchez, the House chair of the committee, questioned Lee on whether critics who have described the ballot question as a “blunt instrument” might be right in suggesting the question as written could have more negative effects on the market than positive.

“I think that it is not worse than the situation we are in now, and we have raised the situation to a height and if there are other options out there we are happy to discuss them,” Lee said.

The Health Care Financing Committee heard testimony on the ballot proposal (H 3931) as it considers whether to try to take action to avert a summer and fall campaign battle over hospital price variation, which multiple reports have attributed to the market clout of large providers, many in the Partners network, who negotiate higher rates from insurers at a cost to patients and smaller, community hospitals.

Supporters say the ballot question, modeled in part off of a bill filed by Sen. Benjamin Downing of Pittsfield, could wring almost $267 million in spending out of the health care system while lowering payments to high cost providers by $463 million and putting $196 million back into community hospitals and hospitals that serve a large volume of low-income patients on Medicaid and Medicare.

Lawmakers have until early July to try to strike a compromise before advocates would be required to decide whether to turn in the required signatures and proceed to the ballot.

Downing said while it’s possible neither his bill nor the ballot question offer the “perfect” solution, he believes action is necessary.

“We ought to reject the idea that the status quo is sustainable,” Downing said. “It doesn’t make any sense to me that if the quality outcomes are the same in a community hospital and academic hospital that they should be paid differently.”

Vehemently opposed by the Massachusetts Hospital Association, some hospital executives that do not belong to that association said the ballot question would be better than the alternative of doing nothing.

The Massachusetts Association of Health Plans also said it had concerns with the ballot question, but officials representing the plans said the gap between the lowest and highest paid providers has been widening.

“While well intentioned we do not believe any initiative petition is the appropriate mechanism to decide public policy,” MAHP President Lora Pellegrini said. “We believe action may be necessary at the legislative level to address market dysfunction.”

Pellegrini and MAHP floated some alternative bills and policy ideas for lawmakers to consider, including allowing the Health Policy Commission to examine not only a provider’s ability to meet cost growth benchmarks, but also prices, and suggested a short-term effort to cap prices could help correct the market.

Alyssa Vangeli, senior health policy manager at Health Care for All, told lawmakers that payments levels should be tied to quality and patient outcomes, and that increased transparency around provider pricing and quality, while not a complete solution, should be considered.

Asked whether the ballot question could impact patient choice in providers, Vangeli said, “Yes, we are concerned and we’re not endorsing the ballot initiative, but we think price variation should be addressed.”

The Massachusetts Hospital Association, represented by Vice President of Government Advocacy Michael Sroczynski and Executive Vice President and General Counsel Timothy Gens, urged the committee to reject the ballot question.

“The specific provisions of the ballot question don’t work as advertised. The numbers don’t work,” Gens told the committee. “The collective provisions we’re convinced would make the health care system work worse, not better.”

Gens called the price caps in the ballot question “arbitrary,” said the regulations would be difficult to apply to alternative payment methods and said trying to exert controls on the health care marketplace through a political campaign is “not a way to make good sound public policy.” He further suggested that community hospitals and those the serve a disproportionate share of patients on Medicaid are struggling with government “underpayment” that won’t be resolved by capping prices.

“It’s only going to get worse if the governor’s budget goes forward with a $30 million safety net withdrawal,” Gens said, referring to Gov. Baker’s budget proposal to zero out the state’s contribution to the fund used to pay for health care for the uninsured. While the administration says it is focused on enrolling the roughly 3 percent of the population without coverage, hospitals and insurers would be required to cover the full cost of caring for the uninsured.

Members of the committee engaged throughout the hearing with those testifying about possible solutions to the problem, but saved some of their most pointed pushback for the hospitals.

“I understand there are issues of government payment, but we’re talking about 50 percent variation on what appears to be from a layperson’s perspective the exact same service. If we can’t acknowledge that’s a problem, we’re going to keep having this conversation for a long, long time,” said Rep. Paul Brodeur, of Melrose.

Sen. Barbara L’Italien, an Andover Democrat, pressed the MHA for alternatives to the ballot question.

“It’s tough to sit here and hear don’t do this and not hear any concrete suggestions,” L’Italien said.

Gens said that since the committee heard testimony on Downing’s bill in September the MHA has convened a group of stakeholders representing the various types of hospitals to examine price variation.

“You didn’t hear me say price wasn’t an issue. We’re not having a conversation in the hospital community about this because we think price isn’t an issue,” Gens said. “We recognize the validity of the issue. We’re just being clear this ballot and the specific proposal is one the hospital community agrees is a bad idea.”

While the MHA said its board, made up of executives that would be “winners and losers” in the ballot fight, were unanimous in its opposition, not all hospitals agreed.

Norwood Hospital President Kim Bassett, who as a Steward Health Care system facility is not a member of MHA, presented a case for why the market power of large teaching hospitals is threatening the survival of smaller community hospitals.

“Let me be clear, I am not asking the Legislature to increase hospital rates. I am urging the Legislature to level the playing field and give community hospitals a fair chance to compete with large, high-priced hospitals and physician groups who offer the same quality of care that community hospitals offer, yet are reimbursed at vastly higher rates than local hospitals,” Bassett said.

While Bassett said the ballot question “may not be the ideal approach to some,” she said “it would start to end the anti-competitive nature of the widening price disparities.”

Mutiple witnesses, echoing a theme oft-repeated by Gov Baker, said said increasing transparency for consumers could be part of the solution, though they admitted it would not totally solve the problem.

“All of that data, in all my years of being a legislator, all of that data really pales in comparison to the recommendation from the guy at the gym who says you have to go to this doctor in Boston,” said Sen. James Welch, a West Springfield Democrat and co-chair of the committee.

Copyright 2016 State House News Service

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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