Partners HealthCare defends costs to state regulators

While it may seem obvious to those of us who read FierceHealthFinance that the argument is flawed at best, apparently regulators with the state of Massachusetts are going after health systems and asking them to explain why health insurance costs are rising.

Last week, Partners HealthCare underwent a grilling by Massachusetts state regulators as to whether the system and its peers were responsible for rising healthcare premiums. The State Division of Insurance, which is investigating the source of rising premiums, seems to have had the idea that these costs were arising largely from higher reimbursement rates insurers were paying to systems like Partners.

David McGuire, Partners vice president for system contracting, made one of the few appearances among his mostly absent peers to argue that rising health insurance premiums spring from national causes. For example, he noted that with Medicare and Medicaid paying low rates, health systems have to jack up rates to private insurers, McGuire said.

He also attempted to explain why Partners' costs are usually higher than competitors, noting that these hospitals have to support high-end services like trauma and burn care. Those costs must be spread across the entire operation, he said.

While such isn't rocket science for most health administrators, merely showing up and stating the case seems to have won points with the state DOI. Last week only two of 17 hospitals invited to testify at the DOI hearing on rising premiums actually showed up.

To find out more about the hearings:
- read this piece from The Boston Globe

Related Articles:
Partners posts $45M gain for fiscal '09
Partners HealthCare chairman accused of conflict of interest
Partners HealthCare consultant, employees face bribery charges

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