Harvard Gets a Taste of Its Own Medicine

The transformation of the employer sponsored health care plans offered by Harvard University has hit the press. Heck, it was even discussed at AALS. Harvard has insulated its employees longer and more fully from the transformation — begun before the passage of the ACA but accelerated by its implementation — of its employer sponsored health insurance from a risk shifting to a risk sharing model. By this I mean that Harvard's employees are being introduced to a world of higher cost-share (deductibles, co-pays, etc.).  Some Harvard employees are not happy at all.

I am agnostic on the question of whether Harvard ought single-handedly bear the cost of expanded health insurance. Conversations about Harvard's endowment are inherently fraught.

Regrettably, what has gotten less attention is the idea that Harvard might — as some employers have — embrace narrow networks in at least some of  its offerings in order to offer a variety of plans that trade off choice and cost.  The New York Times did note: "But Harvard’s ability to create such networks is complicated by the fact that some of Boston’s best-known, most expensive hospitals are affiliated with Harvard Medical School. To create a network of high-value providers, Harvard would probably need to exclude some of its own teaching hospitals, or discourage their use."  

Oh, so much more could have been said.  Harvard's teaching hospitals are, in fact, a leading contributor to health care inflation in Massachusetts, as the Massachusetts Attorney General's 2013 report on the matter amply demonstrates.  The increased concentration of hospitals in Massachusetts, particularly those under the Harvard affiliated banner, has also played a significant role in high health care inflation in Massachusetts. And the proposed Partners Health merger, combining Harvard teaching hospitals with community hospitals has some people concerned that the post-merger entity will bring community hospitals under the Harvard teaching hospital reimbursement rate system.

If Drew Gilpin Faust were really serious about controlling health care costs for her employees, she might have to consider steering her own employees past Harvard affiliated facilities. But that may not pass the political laugh test.

Harvard may be learning what academic medical centers have been learning for a long time: it can be difficult to operate a medical center that serves your own employees at a cost effective price point, a bitter pill indeed.

X-posted at PrawfsBlawg.