A new lawsuit filed last week alleges that Hartford Healthcare is manipulating the healthcare market to drive out competition and raise prices for their services, despite their lower quality.
The class action, brought by six brave Connecticut residents, highlights the harm done to all of us. Ultimately, consumers pay all the bills through our out-of-pocket costs, premiums, taxes, and lost wages. There is overwhelming evidence that consolidation raises prices while doing nothing to improve quality.
This class action is part of a small but growing national movement of consumers opposing healthcare market consolidation. Federal regulators are stepping in to protect competition, to limit price increases, and to protect overwhelmed hospital workers.
Connecticut’s healthcare market has grown increasingly consolidated as health systems purchase more hospitals and other healthcare providers. Accelerated by COVID pressures, more physician practices are joining large health systems across the state. Earlier this month Yale New Haven announced plans to acquire three more hospitals to add to the four Connecticut hospitals they now own. Despite having the most protective laws in the nation, Connecticut state regulators have done very little to stop consolidation, approving the vast majority of merger applications.
The class action claims that Hartford Healthcare has used its monopoly market power in some areas of the state to force insurers to include them in their networks, even in areas where there are less costly, higher-quality options for care. As must-have facilities and practices, they can charge whatever they want across the network. According to the plaintiffs, Hartford Hospital routinely charges over 20% more than other area hospitals for the same services. The cost of Hartford Hospital Emergency Room visits range from 50% to 300% higher than at St. Francis, just two miles away.
According to the complaint, Hartford Healthcare is using anti-competitive contract clauses to inflate their prices. Legislators heard about these anti-competitive practices from national experts in a September forum, and how other states are prohibiting them to control costs. Advocates are urging Connecticut policymakers to pass legislation prohibiting anti-competitive contract clauses.
Aside from the new lawsuit in Connecticut, consumers across the US are exerting their power in response to increasing consolidation. Two lawsuits have been filed in North Carolina and another in California has entered the jury phase of the trial. In Rhode Island, the FTC has intervened in a consolidation proposal on behalf of consumers and also hospital workers. The latter is because nurses and other clinical staff are facing extreme stress from violent patients, overwork, and understaffing by hospital administrators to the point of being concerned that they will lose their licenses. As health systems take over competitors, burned-out staff have nowhere else to work.
Large Connecticut hospitals and health systems are making money, even during the pandemic. In 2020 Connecticut hospitals showed a 2.6% profit while the overall US economy shrank 3.4%. But the quality of care at Connecticut hospitals needs improvement. Connecticut hospitals earn an average of 3.5 out of 5 quality stars from Medicare Compare, and all of our state’s hospitals have been penalized this year for too many patients being readmitted. Rather than trying to corner the market, Connecticut hospitals should remember their purpose and stop escalating prices we can’t afford.