The following is reprinted from Paul Levy's blog "Not Running a Hospital." Paul Levy is the former CEO of Beth Israel Deaconess Medical Center in Boston.
Blue Cross Blue Shield has, in some respects, been a leader in Massachusetts in pursuing the agenda to bend the healthcare cost curve. But the company has a blind spot when it comes to Partners Healthcare System. Worse, it has a history of caving to the economic interests of the dominant provider, even when doing so undercuts the company's stated goal of bending the cost curve. It has now engaged in three golden handshakes with the healthcare system.
The first golden handshake occurred years ago, when BCBS acceded to Sam Thier's statement that, "This is what good healthcare costs," and began a practice of paying the system above-market rates — for care at the academic medical centers, for care at the community hospitals, and for care in the PHS doctors' offices. Every layer of the PHS system received prices above the comparable layer of other hospitals. Year after year after year. The Boston Globe's Thomas Farragher retold that story this week.
The second golden handshake occurred in 2011. It was spun by BCBS as securing a renegotiation of PHS contracts, lowering the rate of increase compared "to what would otherwise happen." But it was actually an above-market increase given to a system with rates that were already substantially above the market.
The third golden handshake occurred this week. In the face of the most important proposed antitrust settlement of the decade, the one between the Attorney General and Partners, the one on which dozens of parties have filed comments with the Court, BCBS was silent. Absolutely silent.
The Massachusetts Association of Health Plans, representing all the other insurers in the state, filed comments against the deal. As noted in Priyanka Dayal McCluskey's Globe story:
The deal, insurers said, "could have the unintended effect of exacerbating the market dysfunction issues it seeks to address."
The highly substantive (!) response from Partners: "It’s no surprise that a lobbying group for the insurance companies has submitted comments that serve their own self-interest."
BCBS, which has more subscribers than all of the rest of MAHP combined, was missing in action.
Its actions over the years and its silence now join it irrevocably with Partners as an advocate for higher health care costs in Massachusetts.