Tuesday, February 10, 2015

Still No Portrait in the Lobby

Anyone who knows me well will be aware of my fondness of aphorisms, one of which is that no hospital administrator ever got his portrait in the lobby for saving money.

As a follow-on to the publicity about the judicial rejection of Partners’ expansion plans and the appointment of its new CEO, The Boston Globe in its February 6 edition ran another front page article under the byline of Robert Weisman, this time headlined Partners looks to mend ties, tame costs.

The article pointed out that “Fears of higher health care costs were at the root of opposition to Partners’ recently rebuffed [expansion] plans” and that “A state judge cited rising health costs when she rejected a settlement in late January that would have allowed the [expansion.}”

Later in the article, the new CEO (Dr. David Torchiana) is quoted as saying “In Massachusetts, there is an almost overwhelmingly singular focus on cost because access has already been addressed” through the state’s 2006 universal health care law.

That same Globe edition carried an article reporting that health insurance companies in Massachusetts are projecting a 7% increase in costs for 2015.  That is almost twice the goal of 3.6% set by the state in 2012.   

Dolores Hamilton, a human resources director for the Town of Framingham, responded to the announced increase by saying "It's a budget-buster" and the article speculated that many employers would be passing the increase along to employees through higher copays and deductibles.  No mention of the need for providers to find less costly ways of providing care.

So we may not yet be ready to live with the pain of serious cost control.  There are signs that we are on the road to getting there but hospital executives who hope to see their portraits in the lobby will for the time being have to get it some other way.


Sunday, February 08, 2015

No One in Charge

In my professionally active days, I liked to tell young administrators that a hospital was an institution with nobody in charge and that success came to those who learned to be productive in that circumstance.

With all the changes that have been taking place in recent times, I came to think that perhaps that advice was out of date, but apparently not so.

Partners HealthCare, the Boston health care behemoth, has just appointed a new CEO, one Dr. David Torchiana.  Since 2003, Dr. Torchiana has been chief executive of the Massachusetts General Physicians Organization, consisting of some 2,000 physicians on the medical staff of the Massachusetts General Hospital.

The appointment was announced in a front page, above the fold article in the February 5 issue of The Boston Globe under the byline of Pryanka Dayal McCluskey and Robert Weisman.  Part way into the article, the reporters, referring to Dr. Torchiana, state that ”In the medical world, the doctor group he heads, consisting of some of the top doctors in the nation, is considered as influential as the hospital itself.”

So it seems that my old observation still applies at the Massachusetts General Hospital.  It is an arrangement that can be made to work as long as nobody cares about cost.  But that is no longer the case.  The Globe article also mentioned the recent denial of the Partners expansion plan by Suffolk Superior Court Judge Janet L. Sanders, who, according to the reporters, “was concerned that a bigger Partners would mean higher health care costs for consumers.  Partners is the state’s highest cost health system.”

The reporters did not connect the reference to influence with the cost issue, but Dr. Torchiana will have to.

Friday, February 06, 2015

The End of Single Payer?

The dream of single payer health insurance for the U.S. may have just met its end in Vermont.

For true liberals, national health insurance, aka single payer, has long been a holy grail – a dream plan for financing health care to be continually pursued.  Every time health care reform has come up – going all the way back to Franklin Roosevelt – the single payer people have thought their time had come, only to be disappointed.  During the process of legislating Obamacare, they plumped for something called the public option – a governmental health insurance program that would compete with the private sector – only to see President Obama abandon their cause by declining to support it.

Not to be discouraged, the government of the liberal state of Vermont then proceeded during the following year (2011) to adopt legislation authorizing a single payer program of its own to be called Green Mountain Care.  The law specified that the Governor (Peter Shumlin) was to develop a detailed financial plan by 2013.  He missed that deadline but in December of 2014 issued a report saying that he would not seek funding for the law, saying that “In my judgment, now is not the time to ask our Legislature to take the step of passing a financing plan for Green Mountain Care.”

Governor Schumlin’s action was reported in an article appearing in the January 25 edition of The Boston Globe (Dream meets reality) under the byline of Jay Fitzgerald.  According to that article, “Governor Peter Shumlin released a financial report that showed the cost of the program would nearly double the size of the state’s budget in the first year alone and require large tax increases for residents and businesses.”  The article also said that the decision “signaled that the dream of universal, government-funded health care in the United States may be near its end.”

I have for many years been pointing out that national health insurance is a remedy for inadequate financing, that the problem in the U.S. was excessive financing and that we therefore would never have single payer.

I rest my case.



Thursday, February 05, 2015

Partners Decision Reach

The rejection of Partners Health Care’s plan to acquire additional hospitals and doctors in the Boston area may have widespread implications.

My earlier posting suggested that it marked a decline in the veneration of big, prestigious teaching hospitals.

An article in the January 31 issue of The Boston Globe (Partners decision could reach far) suggests that another consequence may be an increase in the scrutiny given to the growth ambitions of major hospital systems.

That could well be the case, partly because of Partners’ prominence as a provider of health care, but also because of growing general concern about the relationship between the high cost of health care and the monopoly power of hospitals, which have been rapidly consolidating into large, regional systems.

Laws prohibiting monopolies have always covered hospitals, but there hasn’t been much public concern about the issue and the laws have been rather casually applied.

Underlying all that is the question of whether we want market competition in health care at all.  If we would rather depend on regulation to control cost and quality, then monopoly status doesn’t make much difference.   But if we are to rely on market forces, then monopolies are to be avoided.

The ruling in the Partners case was somewhat ambivalent on that issue.  On the one hand, it took the position that the control methods provided in the agreement were inadequate.  But it also expressed reservations about the ability of Partners to demand higher prices, using the market power it would gain if allowed to expand further.

Perhaps the Partners episode will serve to move us along towards resolution of the matter.


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