Hospital Branding, Money, and Ethics

A recent article by the Boston Globe investigative "Spotlight Team" about the differential payments Partners Health Care receives ("A Healthcare System Badly Out Of Balance") has the Massachusetts health policy community in an uproar.

The gist of the article is that Partners hospitals (most notably Brigham and Women's and Massachusetts General) and physicians are paid 15% - 45% more for treatment not demonstrably better than other facilities provide. Since (a) Massachusetts, like other states, is choking on high health care costs and (b) hospital and physician billing accounts for more than 85% of insurance costs, the story is causing waves.

What struck me most about the article is how much investigation was required for an area of public interest that should be transparent. The Spotlight Team had to rely on private insurance data revealed by one or a series of Deep Throat sources. Although the Massachusetts Health Care Reform law created a Quality and Cost Council, because of technical difficulties and controversy about the quality of the data there have thus far been no reports.

With a new administration coming to Washington in two months we will soon see a new level of challenge to our faith-based reliance on market forces to improve health care quality and cost. Less than a month ago former Federal Reserve chair Alan Greenspan acknowledged "shock" that his faith that market self-regulation would serve the public good was "flawed." Proponents of giving market mechanisms more time to control runaway health spending will have to produce evidence for the likelihood of success rather than simply invoking the sacred truths of ideology.

The U.S. has thus far been reluctant to venture far into tiered networks of hospitals and physicians. It's technically difficult to assess quality and efficiency. But we haven't been reluctant to transfer financial risk to individual patients in the form of high deductibles, asking them to do what we typically ask health plans, Medicare and Medicaid not to do!

Between the economic crisis and heightened skepticism about market solutions for the health care system we can expect to see a mixture of (a) an accelerated, last ditch effort to use market mechanisms like tiered insurance networks in which patients have access to all providers but pay much more for those judged to be lower in quality and efficiency and (b) heightened regulation, including the possibility of moving to a single national insurance plan.

Let's hope for more thoughtful and in-depth deliberation about health policy choices than we have seen for the last eight years.