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AG’s report shines light on quickly rising healthcare costs

In an effort to lower health care costs for patients, Massachusetts Attorney General Martha Coakley released a report Tuesday recommending more assistance to protect lower-cost providers while maintaining healthcare options for consumers.

“Addressing health care costs while preserving quality and access is a priority for our office, as the Commonwealth continues to face significant challenges,” Coakley said in a press release Tuesday. “Our investigation shines a light on the positive benefits of new health care products that focus on both quality service and affordability, but also demonstrates the need for greater transparency to address continued market dysfunctions.”

As the third of its kind, this report builds upon the previous two, released in 2010 and 2011 respectively. The report said the costs of health care were linked to market presence rather than costs of service, and made recommendations to increase transparency in the market and maintain high quality care, according to the release.

This year’s report used previous findings and data to show insurance purchasing trends shifting away from Health Maintenance Organization plans, which can limit patients by requiring the reference of a primary care physician for all procedures, to Preferred Provider Organization plans, which do not need a PCP sign-off, but can cost more for non-preferred physicians, according to the report.

Eric Linzer, spokesman for the Massachusetts Association of Health Plans, said this shift is evidence of a divide between what health care providers want to offer and what consumers are willing to pay for.

“You’ve got the [healthcare] delivery system moving in the direction of giving payment arrangements that require more restrictive types of networks,” he said. “The challenge here for policy makers is to understand that on the one hand you’ve got employers and consumers looking for products with more choice, and yet they begin to run into conflict with the direction the delivery system is moving in.”

Health care providers charged consumers “in ways that are not explained by care coordination or risk contracting requirements” and for taking financial risks without consulting insurance companies, according to the report.

Rich Copp, spokesman for Partners Healthcare, said the providers he represents are among the best in the nation regarding healthcare costs.

“A lot has happened in the recent 2012 period that might not be fully reflected in the Attorney General’s report,” he said. “For example, Partners Healthcare has ripped up contracts with all three of the large insurers here in Massachusetts and lowered charges, providing $345 million in savings for consumers.”

Health plan payment disparities based on 2010 and 2011 financial information were discovered in the report. The same plans created varying budgets for patients of similar health in different parts of the state, they did not uniformly reimburse providers, and they charged different rates for covered procedures depending on if the patient had an HMO or a PPO, according to the report.

After finding the data, Coakley recommended the Health Policy Commission and the Center for Information and Analysis require more reporting from consumers to better measure and enforce unfair pricing, according to the release.

Áron Boros, executive director of CHIA, said his organization was already working toward the recommendations.

“The Attorney General’s recent recommendations are consistent with the Center for Health Information and Analysis’s ongoing efforts to promote transparency in health care costs and quality,” Boros said in an email. “We look forward to continuing … to monitor quality, affordability, and accessibility of health care in the Commonwealth as cost containment is implemented.”

Regardless of certain issues the report found, Copp said the hospitals he represents serve as models for high quality and cost-effective care in Massachusetts and the country.

“We’re responsible for better care, more coordinated care of our [patients,]” he said. “Our goal is to do it in a more cost-effective manner than is being done in other places around the country and that’s what we’re doing.”

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