Massachusetts Attorney General Recommends Caps on Hospital, Physician Prices

Massachusetts Attorney General Martha Coakley has issued her second report on healthcare provider price disparities, saying the state should place temporary caps on prices charged to insurers by hospitals and physicians, according to a Boston Business Journal report.

Ms. Coakley highlighted several facilities with higher prices than their peers, including Partners HealthCare in Boston, Children's Hospital in Boston, UMass Memorial Medical Center in Worcester and BayState Medical Center in Springfield. The report, like its predecessor released in 2010, found that cost differences were not correlated with quality of care.

Ms. Coakley's report also found that global payment arrangements, which pay hospitals and physicians per patient rather than per procedure, did not produce cost savings. Ms. Coakley has repeatedly criticized the plan for global payments, saying the system will not work unless the provider playing field is leveled. Meanwhile, Massachusetts Gov. Deval Patrick has made the move toward global payments a central aspect of his healthcare reform efforts.

Ms. Coakley recommended Massachusetts place temporary caps on the prices charged to insurers and promote the use of limited and tiered insurance networks to encourage consumers to find high-value, low-cost providers.

Blue Cross Blue Shield of Massachusetts responded on Wednesday to Ms. Coakley's report, which found the company's plan to lower costs actually increased prices as much as 36 percent. Blue Cross said the plan is a five-year strategy and that the report focused only on data from 2009, the first year of the insurer's Alternative Quality Contract. The contract aims to reduce the historical rate of increase in healthcare costs while improving quality, according to the report.

Read the Boston Business Journal report on Attorney General Martha Coakley.

Related Articles on Hospital Prices:

Sophisticated and Powerful Consumers: How Transparency Will Change Hospitals
Wide Variation in Service, Price Between Hospitals Despite Similar Quality
As Employee Medical Costs Rise, Hospitals Expected to Increase Transparency

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