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AHIP: Hospital Consolidation is Driving Health Costs

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   February 09, 2010

The attorney general's report notes that the Massachusetts Association of Health Plans concurs with the findings that "approximately 75% of total healthcare costs" are attributed to price—not utilization.

"Although our investigation continues, it is clear that prices paid for healthcare services reflect market leverage," according to the report. "As a greater portion of the commercial healthcare dollar shifts, for reasons other than quality or complexity to those systems with higher payment rates and leverage, costs of the overall system will increase and hospitals with lower payment rates and leverage will continue to be disadvantaged."

Zirkelbach indicated that Massachusetts Attorney General's findings appear to be credible. In a statement, the Massachusetts Association of Health Plans noted, "The AG's interim report on provider payments is an important first step, but there are other aspects of healthcare costs that also need to be examined in order for there to be a more complete and balanced understanding of healthcare cost drivers and how to address concerns over rising costs. Increasing transparency and accountability among all healthcare stakeholders can only help this effort."

The American Hospital Association declined to comment on the Massachusetts report or the America's Insurance Plans assertion.

Spokesman Matt Fenwick referred to an AHA finding that it approves hospital pricing transparency, noting "people deserve meaningful information about the price of their hospital care. Hospitals are committed to sharing information that will help people make important decisions about their healthcare."

Joe Cantlupe is a senior editor with HealthLeaders Media Online.

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