A Peoria, Ill., ambulatory surgery center will get its chance to try to prove allegations that the dominant area hospital improperly manipulated an exclusive contract with an employer health plan to edge the surgicenter out of the market. Without addressing the case's merits, the U.S. District Court for the Central District of Illinois on Dec. 30, 2009, allowed Peoria Day Surgery Center's antitrust lawsuit to proceed to trial. The court said it heard enough evidence that OSF Saint Francis Medical Center's actions could harm local competition and, ultimately, health care access. The trial is expected to begin March 8.It is no secret that monopolies can lead to higher health care costs, but how that occurs is interesting. From a report by the Attorney General of one of the highest health care cost states in the US, Massachusetts:
... our preliminary review has revealed serious system-wide failings in the commercial health care marketplace which, if unaddressed, imperil access to affordable, quality health care. In brief, our investigation has shown:Not to say that adding a single doctor-owned surgery center is going to change downstate health care pricing much since patients remain sheltered from what is actually being paid by insurers for their surgical procedures. But as patients bear a increasingly larger portion of their health care costs, demands for transparency of pricing for elective procedures will mount. Further, as long as competition between centers exists, the wanton nature of health care service price increases by hospitals who monopolize markets has at least a snowball's chance in hell of slowing.
- Prices paid by health insurance companies to hospitals and physician groups vary significantly within the same geographic area and amongst providers offering similar levels of service.
- Price variations are not correlated to (1) quality of care, (2) the sickness or complexity of the population being served, (3) the extent to which a provider is responsible for caring for a large portion of patients on Medicare or Medicaid, or (4) whether a provider is an academic teaching or research facility. Moreover, (5) price variations are not adequately explained by differences in hospital costs of delivering similar services at similar facilities.
- Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers.
- Variation in total medical expenses on a per member per month basis is not correlated to the methodology used to pay for health care, with total medical expenses sometimes higher for globally paid providers than for providers paid on a fee-for-service basis.
- Price increases, not increases in utilization, caused most of the increases in health care costs during the past few years in Massachusetts.
- The commercial health care marketplace has been distorted by contracting practices that reinforce and perpetuate disparities in pricing.
But then again, I'm sure that the Massachusetts AG's finding doesn't pertain to other areas in the United States...
h/t: WSJ Health Blog