Quality of care would fall with 'contracts' bills, Geisinger exec claims
Amid the nation's push toward health reform, legislation introduced in the state House would force some health providers to agree to contracts that encourage more procedures rather than quality of care, officials said.
"In essence, (it) runs contrary to health reform," said Frank J. Trembulak, Geisinger Health System's executive vice president and chief operating officer. "It impedes ... how we might change our delivery structure and financing reform."
Called the Assuring Patient Access and Consumer Choice Act, the two-bill package aims to curtail market power gained via consolidations by prohibiting certain providers from demanding unreasonable rates for services.
Critics say it's an overreaction to the ongoing dispute between health giants Highmark Inc. and University of Pittsburgh Medical Center (UPMC). Their contract, which expires at the end of 2014 for some of University of Pittsburgh Medical Center's hospitals, gives Highmark members cheaper in-network rates for using the medical center's hospitals and doctors.
But the medical center has refused to renew a contract with Highmark that covers their hospitals in certain areas.
The legislation would require hospitals and hospital-owned physician practices that are part of an integrated delivery network, such as Geisinger or UPMC, to contract with any willing insurer.
If negotiations reach an impasse - something an insurer can force - it goes to a binding arbitration hearing. Arbitration favors the rates that insurers propose, Trembulak said.
Geisinger has been experimenting with paying for patient-based outcomes - not the volume of procedures. But if insurers start lowering the payments they make for each procedure, "we turn around and do more procedures. It's not good care. It can even be harmful to the patient," he said.
Also concerning, he said, is that the forced contracting would interfere with the competitive market, especially at a time when Blue Cross of Northeastern Pennsylvania agreed to pursue a stronger affiliation with Highmark.
"To some degree it's the leverage (were concerned about)," Trembulak said. "Our ideal situation is ... to let (it to the) market to play out, understanding that in different markets there will be different competitive pressures."
While the state Medical Society has yet to offer its position on the bills, the Hospital & Healthsystem Association of Pennsylvania voiced its opposition to the bills at a December hearing.
"While the concept of any willing payer legislation may seem to be an avenue to increase access for patients, the highly negative impact it will have on the competitive market will have the exact opposite effect," said Paula A. Bussard, senior vice president of policy and regulatory services.