News & Events

Hospital executive says network trying to become less pricey

Partners’ Glynn ties other factors to rising costs

By Liz Kowalczyk, Globe Staff  |  March 19, 2010

A top executive from Partners HealthCare, the large hospital and physician network that has been blamed by some for helping to push up health care costs, said yesterday the organization realizes it’s too costly and is working to become less expensive.

ButThomas Glynn, chief operating officer for Partners, testified under oath at a state hearing that while prices charged by better-paid hospitals and doctors have contributed to rising health care costs, they don’t have as big of a role as state regulators have suggested.

Attorney General Martha Coakley recently found after a yearlong investigation that the escalating prices charged by the providers with the most market clout, including Partners’ hospitals Massachusetts General and Brigham and Women’s, are a main driver of the state’s spiraling health care costs.

Glynn said other factors, such as residents’ growing use of medical services, particularly as the population ages, are also important. And, he said 18 percent of the amount Partners charges Blue Cross and Blue Shield of Massachusetts, the state’s largest insurer, is to make up for inadequate payments from the government Medicare and Medicaid programs.

Still, he said Partners is working to trim expenses by better managing the care of very sick patientsto reduce hospital stays and by freezing salaries for some employees.

“Do we have a cost problem? Yes. Are we working on it? Yes. Are we working on it hard enough? No.’’ he said.

Glynn’s remarks came on the second day of Patrick administration hearings investigating why health care costs are rising so rapidly and to propose solutions. Hospital and insurance executives answered questions from health care specialists, who were conducting the hearings with state officials, focused on the wide disparity Coakley’s staff found in how much insurers pay providers for essentially the same medical services.

While Partners hospitals are some of the highest paidby private insurers, Lawrence General Hospital is among the worst paid. Dianne Anderson, the president of the hospital, said that since just 25 percent of her patients have private insurance coverage, she has little market clout.

“It’s inexcusable that our hospital and physicians would be paid significantly lower for the same services,’’ she said. “It doesn’t make sense. We’re not asking to be paid as high as Partners. Maybe just Winchester [hospital].’’

Winchester Hospital president Dale Lodge also testified.

Andrew Dreyfus, executive vice president of health care services for Blue Cross, said the organization does “not have the market power to eliminate the disparities’’ on its own. “They are very troubling and they need to change. How do we do that? We work very hard to get the best rates we can.’’

But he said employers have not been interested in buying insurance coverage with limited networks of hospitals and doctors, which could force providers to compete by lowering prices.

Nancy Kane, a professor of management and associate dean for educational programs at the Harvard School of Public Health, said new research shows that hospitals that don’t have the market leverage to charge high prices from private insurers have been able to survive on,and even profit from, Medicare payments. She said this suggests that the ability to make up for low government payments by charging extra to private insurers may make hospitals less efficient.

“When you can get more money from the private sector you spend to that level,’’ she said. “It’s not clear to me that shifting costs is a good excuse’’ for higher prices.

Liz Kowalczyk can be reached at