Saturday, January 31, 2015
Venerating Teaching Hospitals
The days of venerating the big, prestigious teaching
hospitals are ending.
An earlier posting discussed the desire by Partners Health
Care in Boston to acquire some additional hospitals and physicians. An agreement had been worked out with then
Attorney General Martha Coakley to allow it, but that required the approval of
Superior Court Judge Janet Sanders. Coakley
gave up her office to run for Governor (she lost) and was replaced by Maura
Healey. Judge Sanders expressed
reservations about the deal and held up on her decision, waiting to see what
the new AG had to say about it. After
assuming office, Healey said she thought it was a bad idea and on January 29
Judge Sanders issued a ruling rejecting the deal. Judge Sanders found that the settlement
negotiated by the former AG “did not provide sufficient protections to keep
Partners’ market power in check.”
According to news stories, the legal situation is such that
Partners can go ahead with the acquisition if it wants to, but AG Healey says
that if it does, she will file an antitrust suit against it. The Boston Globe had initially come out in
favor of the agreement but on January 30 ran an editorial urging Partners not
to go forward with the acquisition.
When Medicare was enacted in 1965 in the face of strong
opposition by the American Medical Association, I noted that it was the first
time in memory that the federal government had made a medical decision that was
contrary to physician advice and that the AMA would never again have the power
it had previously enjoyed. That has turned
out to be the case. During the deliberations
leading up the enactment of Obamacare, the AMA was barely heard from and ended
up supporting it.
Big, prestigious teaching hospitals have been so respected
and venerated that politicians have wanted always to be in the position of
supporting them. Partners – created by
the merger of the great Massachusetts General Hospital and the almost as great
Brigham and Women’s Hospital – has enjoyed an especially high level of regard –
possibly explaining at least in part why AG Coakley was willing the permit them
to achieve the ability to totally dominate health care in Boston and Eastern
Massachusetts.
The proposition had stirred up a storm of protest by other
hospitals and health care agencies in the area and the new AG apparently
decided that times had changed and opposing Partners was the thing to do.
In politics, defeating an established power is hard, but
once it is done, it becomes easier after that.
So Partners has now endured a very public defeat and it will be downhill
from here.
As is usually true in such cases, the big, prestigious
teaching hospitals were never as much better at what they did as their
reputation had it. Now we are on the way
to a more balanced view of the different kinds of hospitals.
Friday, January 30, 2015
The Health Care Market
We’ve long had trouble deciding whether the health care
establishment can legitimately be considered a market and, if so, how the
market should be organized.
Apparently, the White House staff had the same difficulty
during the run-up to passage of the Affordable Care Act, aka Obamacare. According to a lengthy review of Steven
Brill’s book “America’s Bitter Pill” by Malcolm Gladwell in the January issue
of The New Yorker, the White House health care people and its economics people
contested mightily and at length over the issue. The health care people seemed to think that
health care was a special economic case and that its costs could only be
controlled by a hefty dose of regulation.
The economics people thought competition was the best way to do it.
The kind of competition being visualized involved patients
having a financial incentive to shop around for services. The argument against that is that when one is
sick or injured, finances are the farthest thing from the mind.
Apparently, no consideration was given to a possible role
for HMOs and insurance companies. Those
organizations can assemble panels of providers with which they have negotiated
prices. Patients can then choose among
competing companies based on what they consider to be the best value in terms
of price and quality. An insurance
company can actually assemble more than one panel with different premiums
associated with each.
The advantage of that arrangement is that patients make economic
decisions relating to health care by choosing an insurance company and a panel
of providers when they are well rather than when they are ill or injured..
