Maryland business a no-show in health-cost fight

February 21, 2011|By Jay Hancock

A well-connected group of doctors wants Annapolis to let orthopedists and other specialists refer patients to their own MRI machines and other expensive equipment. This kind of arrangement drives up health costs by giving doctors the incentive to profit from unnecessary scans, numerous studies show.

Fortunately, powerful Maryland groups harmed by the ruinous spiral of medical inflation have every reason to fight back.

There's CareFirst BlueCross BlueShield, the state's biggest health insurer. It was CareFirst that got orthopedist-owned MRI machines outlawed in Maryland.

And there's the Maryland Chamber of Commerce, the big-business lobby. Its members are getting plastered by health-insurance costs, already twice as high in America as in other developed countries.

But wait! CareFirst seems to have headed to the sidelines. And the chamber isn't opposing the bill either, saying it has members on both sides of the issue.

So it looks like business as usual. People who make their living off the Maryland health care monster work to keep it growing or turn a blind eye. And those harmed by it are scarce in Annapolis or anywhere else. The business community, especially, is out to lunch.

Worried that orthopedists might be cranking up the tab by ordering dubious scans on their own MRI machines, CareFirst complained to regulators. As a result, the Board of Physicians ruled in late 2006 that Maryland's physician self-referral law bans doctors such as orthopedists and cardiologists from owning MRI scanners.

The idea behind the law is to prevent a conflict of interest by separating the people ordering the procedure from the ones profiting from it. Last month Maryland's highest court confirmed the Board of Physicians' decision, prompting the orthopedists to request relief in the legislature.

So CareFirst must be jubilant. It was vindicated in the courts. It must be working to defeat a bill that will lower its profit margins and drive up costs for its customers, right?

"CareFirst is declining further comment at this time," spokesman Kevin Kane said after I asked several times whether the company opposed the bill.

I can only conclude that CareFirst flip-flopped and will not oppose the legislation. When you own half the health insurance market in Maryland and want to maintain peace with the docs, maybe it's easier to pass high costs on to your customers than to fight dubious medical claims.

If anybody should oppose doctor self-referral it's the chamber. Employers still pay the large majority of the premiums for private health insurance, according to the Kaiser Family Foundation. Medical costs are much more important for businesses than whether or not, say, Maryland decides to require "combined reporting" for the corporate income tax, one of the chamber's big hobbyhorses.

But the chamber isn't taking a stance on self-referral.

"It turns out we've got folks on both sides of the issue who are members," says chamber lobbyist Ron Wineholt.

This demonstrates a larger problem. The chamber's diverse membership keeps it from being an effective advocate for companies on other issues relating to medical costs. In Maryland, even more than other states, the "business community" represented by the chamber includes the folks who profit from health care inflation.

Hospitals are chamber members. While it routinely lobbies against new health-insurance coverage requirements, the chamber avoids fights over hospital rates and medical-facility arms races that would cut into providers' bottom lines — and really make a difference in soaring costs.

Nor has Maryland business marshaled its power anywhere else to firmly fight the health care monster. There is nothing here resembling the Pacific Business Group on Health, a California coalition that hammers on policymakers and providers alike to control costs.

Business doesn't even have a representative at the moment on the Maryland Health Services Cost Review Commission, which sets hospital rates.

The medical-industrial complex counts on such a vacuum.

Health insurance premiums are going up again. Corporate CEOs are sure to complain. But neither they nor Maryland's biggest medical insurer seem to be doing as much as they could to fight back.

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