As legislative leaders go down to the wire negotiating a major health care cost-control bill, Governor Deval Patrick has proposed a new approach for targeting large, expensive hospitals and doctors groups that may be driving up fees by abusing their market power.
The governor’s plan requires the administration to conduct a “cost and market impact review’’ of any medical provider it suspects is engaging in or plans to engage in anticompetitive behavior.
If the review finds that the provider has dominant market share, and has “materially higher’’ prices and total medical expenses than competitors, then the administration must refer the case to Attorney General Martha Coakley’s office for formal investigation. Total medical expense measures the total spending on medical care for a group of people; the reviewers would take into account the health status of a provider’s patients.
The attorney general would determine whether the provider gained its advantage by violating the law prohibiting unfair methods of competition.
“Having market power is not necessarily a bad thing, and price differentials are not necessarily a bad thing,’’ said Jay Gonzalez, Patrick’s secretary of administration and finance. “This proposal recognizes that. We are trying to focus reviews where market power may be leveraged in a way that is working against the interest of the consumer.’’
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