Massachusetts commission to lawmakers: Address hospital pricing

The Massachusetts Health Policy Commission is recommending that state lawmakers take direct policy action to address provider price variation.

The recommendation comes in a report issued by the state's healthcare watchdog, in which the commission cites "strong and consistent evidence of persistent unwarranted price variation" in Massachusetts. The commission said there is also evidence that the market has not made meaningful progress toward fixing the issue.

Since 2010, extensive variation in both hospital and physician prices for the same sets of services has been documented by multiple state agencies, according to research from the commission. Specifically, the research found that the highest-priced hospitals and physician groups had prices two to four times those of the lowest-priced hospitals and physician groups among the three largest commercial payers, with higher variation among some smaller payers.

The commission also found that provider price variation has not lessened over time.

"Neither hospital nor physician prices are converging. Both the extent of variation and the distribution of hospital prices have been generally consistent since 2010, and the variation in physician prices has increased somewhat since 2009," the commission said.

Moving forward, the commission said it will convene stakeholders to present and discuss specific, data-driven policy options for consideration by state lawmakers, other policy makers and market participants.

Massachusetts meanwhile has convened a special commission that will make policy recommendations to address hospital pricing, according to a Boston Business Journal report. The special commission is part of a compromise that Massachusetts Gov. Charlie Baker (R) signed into law to avoid a ballot question concerning hospital pricing.



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