A top Massachusetts health care official warned Thursday that suddenly slashing hospital payments by hundreds of millions of dollars — as proposed in a controversial ballot initiative — could devastate some of the state’s most important hospitals.
The Service Employees International Union, Local 1199, has been pushing a statewide ballot question that seeks to reduce the payment disparities between different health care providers by taking $440 million away from hospitals at the state’s highest-priced hospital network, Partners HealthCare, and raising payments for many other hospitals. Stuart Altman, chairman of the state Health Policy Commission, did not specifically cite the ballot question at a public meeting Thursday but raised concerns about its approach.
“You would destroy institutions overnight,” said Altman, an economist at Brandeis University and a health policy veteran.
The commission, a watchdog agency that monitors medical spending, has reported that “unwarranted price variation” persists in Massachusetts, resulting in some hospitals being paid more than others for providing essentially the same care. The dynamic is squeezing smaller community hospitals that have trouble competing against larger Boston teaching hospitals with more market power, according to the commission.
The agency has held several meetings to discuss price variation but has yet to recommend a specific strategy for addressing the issue.
Altman said in an interview that the proposed ballot question — which would prohibit hospitals from being paid more than 20 percent above average for a particular medical service — attempts to do too much too fast. He said any policy changes should be phased in over time so hospitals can adapt to them.
“I do think you have to look at the impact on institutions — unless you want to destroy a few of them,” Altman said.
Partners executives say the ballot initiative would force them to cut thousands of jobs. Partners runs 10 hospitals, including Massachusetts General and Brigham and Women’s.
Meanwhile, representatives from Partners and the broader hospital industry have been negotiating with the SEIU to try to find an alternative to the ballot question. Top Beacon Hill aides also met recently to discuss the issue.