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Paul Levy: Partners' 'Chutzpah' On $40M Donation

Former Beth Israel Deaconess chief Paul Levy

Paul Levy's Not Running A Hospital blog is particularly punchy today.

So here, in its entirety, is his latest post. In it, he comments on a news story published in The Boston Globe this weekend. It suggested that Partners HealthCare, which had promised $40 million to help alleviate rising health care costs in the region, might pay out the money through renegotiated insurance contracts, rather than simply writing a check. (Partners posts clarification on its blog here, saying Partners "plans to pay the $40 million regardless of whether the talks with insurers produce results.")

Here's Paul's post:

Chutzpah, timidity, prediction, policy
What do you call it when a hospital and physician system gets to collect an extra, say, $200 million per year in insurance payments for a decade and a half? What do you call it when that system promises a one-time donation of $40 million towards a crisis in individual and small business insurance premiums, but then says, "We didn't necessarily mean cash" — but preferably a negotiated offset to a previously unspecified and unknowable level of future rates?

Chutzpah.

What do you call it when the Commonwealth has the legal authority to publicize the data it has already collected and to take actions to moderate the payments made by insurance companies to this hospital and physician system, but chooses not to?

Timidity.

What do you call this?

The parties agree to experiment with bundled payments for certain diseases and procedures, staying far away, though, from a full system of capitation. The parties agree to a general rate increase of just a few percent. Together, they will say, this will "bend the cost curve" for this large group of doctors and hospitals. There won't be much talk about the fact that the base upon which the bundled payments and other fee-for-service payments is set remains far above market.

End result: Continued use of market power as the prime determinant in setting reimbursement rates.

A pretty accurate prediction.

What do you call it when all this is happening before our eyes?

Massachusetts health care policy.

This program aired on August 2, 2011. The audio for this program is not available.

Rachel Zimmerman Twitter Health Reporter
Rachel Zimmerman previously reported on health and the intersection of health and business for Bostonomix.

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