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.
