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Globe Editorial

Hospitals disrespect state by shunning cost hearings

January 11, 2010

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IF MASSACHUSETTS health care reform is to avoid becoming a medical Big Dig of out-of-control costs, the state, insurance companies, and hospitals have to devise ways to limit medical bills without hurting quality. The need for concerted action makes it all the more disappointing that most major hospitals have not shown up at recent state Division of Insurance hearings to address the problem of escalating costs.

Massachusetts has won praise nationally for its success in providing near-universal coverage to its residents. But failure to now move quickly and boldly to limit the growth of health care costs would not only discredit the state’s pioneering initiative, it would also hurt the state’s ability to attract and hold onto businesses. Double-digit premium increases have hit small businesses, the most productive generators of new jobs, particularly hard.

The state is acting on two fronts. Its payment-reform commission last year called for a shift away from fee-for-service reimbursement and toward an annual “global payment’’ system in which hospitals are paid for results. The Legislature has yet to act on those proposals, which would take years to implement in any case.

The Division of Insurance hearings started as a way to address the immediate problem of the crushing premium increases faced by small businesses. But cost increases are a problem for everyone in the commonwealth. If nothing else, the sessions have had the potential to lay out the factors driving costs and causing the disparity in rates among different hospitals. Insurance company executives at least showed up, although they would not state publicly why they pay some hospitals and doctors three times as much as others for the same procedure.

For the most part, hospital executives have not even made an appearance. Of 17 hospitals invited to last Thursday’s session, just two were represented; on Friday, two of 12 came. CEOs can point to scheduling conflicts, but they could have sent subordinates to help state officials - and the public - understand why, for instance, some small businesses have seen premium increases of 20 percent. They have until Friday to submit written information.

“Health costs that strangle small businesses - that’s not good for the Massachusetts economy,’’ Barbara Anthony, the state’s undersecretary for consumer affairs and business administration, said Friday. Hospitals must play a role in controlling costs, and they cannot duck that responsibility.

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