Hospital Prices Gouging Massachusetts Small Businesses

Date: March 15, 2016

A proposed ballot initiative would regulate how much hospitals can charge in Massachusetts for healthcare

Hospital Prices Gouging Massachusetts Small Businesses

Alarming cost disparities between teaching hospitals and community hospitals have Massachusetts’ voters trying to get a ballot measure approved for November that would regulate costs around the state.

A new government report found that Massachusetts’ teaching hospitals charged significantly more for its services than community hospitals in the state. Teaching hospitals charge higher prices because they see more patients, but provide “essentially the same quality of care,” according to the Boston Globe.

This practice is harming small business, NFIB/Massachusetts State Director Bill Vernon says, because the unjustified higher costs force small businesses to buy affordable policies that offer access only to lower cost hospitals or pay the higher fees for teaching hospitals. “We’re very concerned about healthcare; it’s definitely driving up costs for small businesses,” Vernon says.

The proposed ballot measure would restrict hospitals from charging more than 20 percent higher than the average price for a medical service or no more than 10 percent lower, according to Commonwealth magazine. Although this discrepancy is harmful to small businesses, owners aren’t quite ready to throw their support behind the ballot measure as the impact of the price control solution on quality and availability of care is worrisome.

If lawmakers do not act on the initiative before May 3, ballot proponents will have to collect approximately 10,000 additional signatures to get the measure on the November ballot.

Because healthcare is such a prominent industry in Massachusetts, business leaders are skeptical of pushing through a ballot measure that might have unintended consequences. Many—such as NFIB— are not ready to form an opinion on the ballot question. “It’s not the best way to write healthcare law,” Vernon says.

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