Legislators hear diverse voices favoring competition to control healthcare costs

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Update 3/22/2022 — SB-416 passed the Insurance and Real Estate Committee unanimously.

Twenty-one organizations and state residents testified in favor of SB-416 in Thursday’s Insurance and Real Estate Committee public hearing. Just three testified against. SB-416 would level the playing field in Connecticut’s healthcare market by prohibiting anti-competitive contract clauses used by large health systems to raise their prices.

Connecticut is among the most consolidated healthcare markets in the US. In consolidated markets like Connecticut’s, insurers and employers must include a hospital or other provider in their network because there are no other alternatives. Through anti-competitive contract clauses, a health system can link a must-have provider to others in competitive markets. These clauses allow big health systems to name their own price for all their providers, not just the must-have entity.

Despite promises, consolidation has done nothing to improve healthcare quality or care coordination. It is also very disruptive for stressed and understaffed clinicians working in hospitals driving many to quit their jobs.

Two lawsuits have been filed against Hartford Healthcare for anti-competitive conduct, which drives up healthcare costs across the state. A legislative forum last September included experts on the impact of consolidation and other concerns.

Testimony for the bill came from twenty-one legislators, advocates, a health system, insurers, an insurance broker, state agencies, Connecticut’s Health Care Advocate, and numerous state residents. Testimony noted the need to make healthcare affordable, lower insurance premiums, improve quality and access to care, as well as protect hospital workers from unsafe, extremely stressful workplaces so they can care for patients.

While the Office of Health Strategy testified in support of SB-416, they also proposed exempting a list of health systems including Accountable Care Organizations (ACOs). All large health systems are ACOs. If adopted, OHS’s proposal would negate the entire law.

Predictably, the Connecticut Hospital Association submitted testimony against the bill. CHA is concerned that “The section of SB 416 that would bar “all-or-nothing” arrangements would mean healthcare systems would not be permitted to negotiate with payers to ensure patients will have coverage for the full spectrum of services in a care network and to ensure patients can choose their doctors and care team.”

But in fact, prohibiting all-or-nothing clauses encourages negotiation with providers to provide a full spectrum of services. It is important to note that care continuity and price setting are very different functions. Providers must routinely coordinate care across health systems as consumers choose the best providers for their needs, rather than following corporate structures.

Also among those who testified against the bill with unclear concerns were a health system and a group of specialty physician organizations.