Expert examines legislative, election angles of Massachusetts hospital pricing question


BOSTON >> A former state lawmaker and health care expert has a fresh take on an initiative petition quietly working its way to the November ballot that could shake up hospital finances in Massachusetts.

Writing in Commonwealth magazine, former Rep. John McDonough said experts and industry officials with whom he has spoken all agree the ballot question's passage would have a "profound" effect by redistributing more than $450 million annually from the Partners Healthcare system and South Shore Hospital to other hospitals and premium payers while also "making state government responsible for hospital finances for the first time since 1991."

McDonough, who was in the Legislature in the years just before and after hospital rate-setting was deregulated in the early 1990s, called Service Employees International Union, which is leading the ballot push, "among the smartest and nimblest unions in Massachusetts" and said it's hard to predict how the Legislature will react in the coming months to the proposal, which targets disparities in prices paid to hospitals for similar services.

"Expect anything from zilch to enactment of the nation's first state law to address hospital-pricing variation. If the initiative goes to the November ballot, expect a high-spending all-out war," McDonough wrote, later adding, "Many observers believe that Partners' sizable financial advantage would overwhelm SEIU in a full-scale ballot campaign in the fall of 2016. But in the crowded campaign season with a presidential election and many other high-profile ballot questions competing for limited TV airtime, the outcome is unclear."

McDonough ticked off examples of activists using ballot initiatives to force the Legislature to enact laws, citing a 1994 campaign finance reform effort led by Common Cause, a managed care bill of rights approved in 2000, and a 2015 law on nurse-patient staffing ratios in intensive care units.

McDonough concluded, "The consequences of renewed hospital finance regulation would go way beyond price variation in positive and negative ways that no one can predict. The best outcome would fit with the gestalt of the strategic ballot initiative: The initiative threat compels stakeholders to agree on a deal that leaves all better off than they would be under the initiative's formula. If that is to happen, state leaders will need to step in because the stakeholders will be unable to do it themselves."

The House last week referred the initiative petition (H 3931), dubbed the Massachusetts Fair Health Care Pricing Act, to the Financial Services Committee. The Senate agreed to House referrals of other initiative petitions but has not yet concurred on the health care pricing act and may recommend sending it to the Health Care Financing Committee. It would then be up to branch leaders to settle on a committee so a public hearing can be held on the petition.

McDonough's full opinion piece:


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