Tags: affordability

Over the course of the past several months the state’s Price Variation Commission has examined the many factors that contribute to differences in hospital prices.  The group agrees that there are many factors that warrant variation in hospital pricing.  For example, hospitals that care for sicker patients deserve higher levels of reimbursement.

Two issues that come up as part of the debate are market power and brand.  While the two are related, they are not the same.  Market power is usually considered a measure of strength at the negotiating table, typically driven by size.  As we have detailed in this space before, Partners maintains about 22% of the eastern Massachusetts marketplace based on many metrics; covered lives, primary care providers or hospital beds. Our community network has actually diminished by more than 20% in recent years, in part because of regulatory restrictions.  While we remain the largest provider organization in the state, it is clearly not a market dominant position and every one of our major hospitals has a competitor available as a market substitute within a few miles.  Based solely on the criterion of market share the primary health insurers that we negotiate with have a similar or greater market share. Contending that Partners has unwarranted market power based on size is not factually accurate.

Brand is another issue.  Brand is essentially the reputation that a hospital or doctor’s group has earned caring for patients and families over many years (sometimes generations).  Simply put, brand is the cumulative result of the patient experience.  Brand is earned over time by delivering high quality care in a manner that builds trust and respect with the patient, their family and the entire community that is served by a hospital.

The federal government requires all hospitals to track and report patient experience through a standardized survey of hospital patients, called HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems).  The measure most relevant to brand is called “Willingness to Recommend.” 

When asked the important question, “Would you recommend this hospital to friends and family?” MGH was ranked in the 97th percentile and BWH in the 90th nationally – unusually high numbers particularly given that academic medical centers typically score lower than community hospitals because of their size and complexity. Patients do not come to Partners institutions just because we have a strong brand.   In reality we have a strong brand because of patient preference. A hospital’s brand is earned over time. Brand is the result of the patient experience.