Four business and trade groups are calling on the state to do more to rein in the prices charged by hospitals and doctors, saying rising health care costs are hurting consumers and the economy.
The groups — representing retailers, insurers, and small and large businesses — did not offer specific ways to attack rising health care costs, but in a report to be released Tuesday identified the main culprit as medical prices. Echoing studies by the attorney general's office and state Health Policy Commission, the business groups noted providers charging the highest prices don't necessarily give the highest-quality care.
"This problem has been building for years and years, so we're not going to fix it overnight," said Rick Lord, chief executive of Associated Industries of Massachusetts, one of the state's largest employers groups. "I'm hoping we can really start to identify some new solutions."
AIM joined the Massachusetts Association of Health Plans, the Retailers Association of Massachusetts, and the National Federation of Independent Business in funding the study. The analysis did not crunch any raw health care data. Instead, it combed through more than two dozen reports issued by the Massachusetts attorney general's office and various state agencies over the past several years and identified trends contributing to increasing costs.
Among them: health care provider prices that vary widely from one hospital to another and often reflect market clout more than quality of care. These disparities contribute to higher health care costs because the providers that treat the most patients — such as Partners HealthCare of Boston — also charge some of the highest prices.
Business leaders said they hoped the report would serve as a launching pad for a discussion about new strategies to tackle health care costs.
"We've studied the hell out of all this stuff; we know it's a problem," said Jon Hurst, president of the Retailers Association of Massachusetts. "We need to take some action."
Massachusetts passed a landmark law mandating universal health insurance coverage in 2006 and six years later approved another law meant to address what many in the industry see as part two of health reform: reining in costs.
The 2012 law established new agencies, including the Health Policy Commission, to study health care spending and market consolidation. It also set a target for the state's annual health spending growth, at 3.6 percent. Massachusetts exceeded that goal in 2014, when spending increased 4.8 percent, largely because of higher spending in the government program of Medicaid.
The law also called on another state agency, the Center for Health Information and Analysis, to create a new website to help consumers understand health care pricing, but that site has yet to be designed.
Lora Pellegrini, chief executive of the Massachusetts Association of Health Plans, said cost control efforts, such as setting budgets under which to provide patient care, have not done enough to control provider prices. "They basically embed high rates of payment into the payment structure," she said. "Taking on the provider community is not easy."
But Lynn Nicholas, chief executive of the Massachusetts Hospital Association, said health care providers should not bear the blame alone.
"Variation in pricing has always existed," she said. "The health plans should be the least surprised of all by this because they negotiated the rates with the providers in the first place. Perhaps health plans should be more transparent and explain why they pay two community hospitals . . . very different rates."
A recent report from the Health Policy Commission found that for one common type of medical service, maternity care, spending varied widely from less than $10,000 to as much as $18,500. The highest-paid hospitals for baby deliveries were Massachusetts General and Brigham and Women's, which are both owned by Partners.
Partners has said its hospitals' higher costs reflect a commitment to providing high-quality and complex care, training future doctors, and conducting cutting-edge research.
David Seltz, executive director of the Health Policy Commission, said in a statement that commissioners are discussing ways the state can address unwarranted price variation and improve transparency around health care prices.
"While the Commonwealth has made some progress in important areas, further action is needed to improve the overall performance of the health care system in Massachusetts," he said.