State gets warning on health price disparities

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A state watchdog agency issued a stern warning Wednesday on the wide variation in prices of medical services, saying the state must take action to curb disparities that are pushing health care costs even higher.

Some Massachusetts hospitals and doctors groups receive higher payments than their lower-priced competitors for essentially the same medical care, the Health Policy Commission said in a new report.

Such disparities drive overall health costs higher because the most expensive providers, including Partners HealthCare of Boston, also treat the most patients.

The findings echoed a 2015 report from Attorney General Maura Healey ; earlier studies by her predecessor, former attorney general Martha Coakley; and an investigation by The Boston Globe, which drew the same basic conclusion: Some health care providers are paid more than others not because they give better care, but because they have more market power.

"Work by multiple state agencies over the last six years has documented significant variation in provider prices that is not tied to measurable differences in quality, complexity, or other common measures of value," the Health Policy Commission's report said.

The commission identified Partners as the operator of the state's highest-paid hospitals. Partners owns 10 hospitals, including Brigham and Women's and Massachusetts General, and is the state's largest health care system.

The report called physicians at Partners, Boston Children's Hospital, and Newton-based Atrius Health the highest-priced doctors networks.

Partners spokesman Rich Copp noted that the agency's previous reports have acknowledged Partners is a high-quality provider — even though the commission said Wednesday that price variations are generally not linked to quality of care.

"Any perceived market power that Partners has comes from the public's knowledge of our hospitals' quality, and the willingness of the public to recommend and return to our institutions," Copp said in a statement.

Dr. Steven Strongwater, chief executive of Atrius, which includes Harvard Vanguard Medical Associates and other physicians, said Atrius's prices reflect "a very complete package of care for our patients." Atrius has worked to reduce overall costs over the past few years, he added in a statement.

Children's Hospital had no immediate comment.

The Health Policy Commission's report adds weight to efforts to close the price gap among providers.

The Service Employees International Union, a large labor union that represents hospital workers, is pushing legislation and a statewide ballot question that would level payments by taking money from Partners and redistributing it among several lower-paid hospitals.

The Health Policy Commission stopped short of endorsing any particular measure to tackle price variation Wednesday, but said it will hold meetings in the coming weeks to discuss specific recommendations

Lynn Nicholas , president of the Massachusetts Hospital Association, said the trade group opposes any legislation that would regulate payments, but said hospitals agree that price disparities should be addressed.

"Something other than the status quo is probably warranted," she said. " Most [hospitals] are hopeful we can have a market-driven approach, not a regulatory approach.''

It's unclear whether lawmakers will tackle health care price disparities. State Representative Jeffrey Sanchez, Democrat of Jamaica Plain, the House chairman of the Joint Committee on Health Care Financing, said he and his colleagues are still trying to determine whether legislation would be appropriate.

"It's an extremely complex subject area," Sanchez said. "The question is: what is there to do, if anything, on the legislative side? Right now, we're just deliberating."

Governor Charlie Baker is exploring ways to increase transparency in health care pricing, said a spokeswoman, Lizzy Guyton.

This includes stronger enforcement of a 2012 health care cost control law that required insurers and providers to make pricing information more readily available.