HealthLeaders (‘Vicious Cycle’ Flagged in MA Hospital Financing Disparities) reports today on a white paper we contributed to about the impact of hospital price differences in Massachusetts. We built on previously publicized price data to highlight the implications for middle class and lower income communities: they effectively subsidize their richer brethren who pay the same premiums but get their routine care from pricier providers.
One of the things that surprised us is that Medicaid managed care plans, which are hired by the state, pay teaching hospitals much more than they pay community hospitals.
The report includes four recommendations to address the disparities:
- Require high-cost providers to hold cost growth below the general benchmark under Chapter 224 of health reform
- Consider each provider’s payer mix when setting Medicaid (and possibly commercial) rates
- Implement a Medicaid Accountable Care Organization (ACO) to contain costs and encourage quality, rather than relying on cutting unit prices
- Encourage commercial health plans to design products that reward members who use low cost providers
I’m quoted in the article.
—March 21, 2014