A group of Connecticut citizens is sue Hartford HealthCarealleging that the large hospital system has accumulated monopoly power “to extract higher prices from insurers, employers and patients”.
Why is it important: This is another class action lawsuit arguing that hospital consolidation has crushed everyone’s bank accounts and led to the rise of anti-competitive contracts that force insurers and employers to agree to terms to take or let.
“Even if you don’t live in Connecticut, you should be worried [these hospital behaviors]because you pay for it through your insurer,” said Ellen Andrews, head of consumer advocacy group CT Health Policy Project.
Driving the news: People with commercial insurance in Connecticut allege Hartford HealthCare, a A $5 billion hospital systemhas picked up hospitals across the state and built that leverage into insurance contracts, including:
- All or nothing contracts. Insurers exclude hospitals from the networks if the hospitals have lower quality or higher prices, but Hartford reportedly required insurers to include all of its hospitals — including more expensive ones in more competitive areas — in the networks.
- “Anti-robbery” contracts. The insurances.
The other side: Hartford HealthCare said in a declaration the lawsuit lacks merit and “the allegations misrepresent the many ways in which Hartford HealthCare is working to transform healthcare.”
The big picture: All-or-nothing and anti-robbery contracts have been commonplace for several years — something the wall street journal helped expose in 2018 — and antitrust authorities took notice.
- In 2018, Atrium Health in North Carolina agreed to a settlement with the federal government to resolve allegations that the hospital system forced insurers not to remove patients from its facilities.
- In 2019, Sutter Health settled with California for allegedly forcing insurers to include all of Sutter’s hospitals and clinics in the networks.
- Last year, a class action lawsuit filed against HCA accused HCA’s Mission Health system of imposing all-or-nothing contracts.
Between the lines: Some members of Congress have proposed banning these types of contracts in 2019but the legislation did not go anywhere.
What to watch: Most metropolitan areas have consolidated hospital marketsit is therefore possible that other such lawsuits will appear.
- “We’re in intensive catch-up mode,” said Barak Richman, a healthcare antitrust expert at Duke University.