Hartford Business Journal

www.HartfordBusiness.com • June 17, 2019 • Hartford Business Journal 15 state, the report said. "It's really hard to unscramble eggs," said Cooper. "Once you allow hospitals to merge, you don't have a lot of re- course if those merged parties are able to extract higher prices. What this [cap] does is put into place a safety net." Staying under the cap Hospital mergers have been the norm in Connecticut over the past decade, with Hartford HealthCare and Yale New Haven Health (YNNH) emerging as two powerful systems, followed by smaller systems created Trinity Health of New England (parent of St. Francis Hospital and Medical Center) and California-based Prospect Medical Holdings Inc. (owner of Eastern Connecticut Health Network). OHS' Veltri wouldn't comment on whether other pending or future merg- ers, including Hartford HealthCare's proposed acquisition of St. Vincent's Hospital in Bridgeport, would include some kind of price cap. Meantime, officials from YNNH, parent of Bridgeport Hospital and now Milford Hospital, as well as Nuvance Health say they aren't overly concerned about the price caps. Nuvance Chief Financial Officer Steven Rosenberg said his new health system — which includes hospitals in Danbury, Norwalk and Sharon as well as three in New York — projects a maximum 3 percent-a-year cost in- crease over the next three years. "So we feel comfortable that we're going to be able to manage with this 3 percent cap," Rosenberg said. Rosenberg, who was Western Con- necticut Health Network's CFO before the merger, said the system has run a lean operation and its history with insurers and other payers has been "very collaborative." "We have not in recent history gone back to them asking for any significant kinds of price increases," he said. YNNH spokesman Vin Petrini said the $4.17-billion health system sup- ports OHS' efforts to reduce costs, which he called "critically important." "When we got the decision from OHS, we certainly understood where they were coming from and agreed to it," Petrini said. However, Rosenberg said hospitals have numerous outside pressures that can put a squeeze on budgets, includ- ing shrinking Medicaid reimburse- ments, Connecticut's hospital tax and the rising price of pharmaceuticals. Hospitals often look to their com- mercial contracts to help make up for some of those losses, he said. "If we're getting a 3 percent cap on our pricing and pharmaceuticals are going up 8 to 10 percent each year, that presents a challenge," he said. Petrini said rates the state's Medicaid program pays hospitals for services don't cover actual costs. Raising them, and restructuring the hospital tax — as Gov. Ned Lamont has recently signaled he will do — would help slow cost growth for patients on commercial insurance policies, he said. "I think if we're going to have that conversation about [a Massachusetts- style] healthcare policy, we need to have the broad conversation about reim- bursement of Medicaid and Medicare as well," Petrini said. Matt Pilon contributed to this story. State regulator eyes more expansive cost-control powers During the recent legislative ses- sion, the Office of Health Strategy sought to build upon the healthcare cost-cap powers it's enforced on two hospital deals this year. A proposed bill in the recent leg- islative session would have required healthcare providers to adhere to annual cost increase restrictions, or face public and regulatory scrutiny. The legislation ultimately died in the final 24 hours of the session, but it's likely it will be brought up again next year. The proposed duties and powers the bill aimed to give OHS included: • Setting an annual healthcare cost growth benchmark for the state across all payers and populations. • As of 2022, should total state healthcare spending exceed the OHS benchmark, the agency would have identified the provid- ers or payers responsible and pursued them for performance improvement plans. • Similarly, if drug companies exceed the benchmark, OHS would have been permitted to require the companies to participate in public hearings about their pricing. FOCUS TPC River Highlands | Cromwell, CT 6.17-23 FUN FOR EVERYONE FAN ZONE KIDS ZONE BUY TICKETS NOW

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