Tsunami heading here

With the speed of tidal changes in the Bay of Fundy, word is now arriving at hospitals throughout the state that they will be given rate decreases in their current contract renewals.

Think about this. These hospitals face increases in salaries and wages for their nurses and other staff (sometimes as contractual commitments in collective bargaining agreements) and increases in the cost of goods and supplies needed for patient care.

Insurers say, in essence, "That's not our problem."

Well, it is your problem. Insurers do not deliver care. They are financial intermediaries who add little value to the provision of health care*. If they cut the resources needed by hospitals, they will affect communities throughout the state.

By communities, I mean people. Workers at hospitals. Patients and families in the cities and towns.

We need to remember that the proximate cause of this crisis is an Administration that imposed arbitrary price caps on the insurers and then told them to go make up the losses by squeezing the providers.

But not all providers. Not the ones who were found by the Attorney General to have rates that are out of whack.

As disclosed by the Attorney General in explaining the longer term health care cost trend: Disparities in reimbursement rates permitted the highly compensated hospitals and physician groups to expand market share by building facilities and recruiting doctors, compounding the rate advantage they already had.

If we have a $100 million or $200 million short-term problem, let's look in the right place for the solution. Beyond the short-term problem, there is a structural problem that arises out of the state's noble decision to provide greater access to health care and out of the rate-making process that rewards market power.

Insurers who characterize their current approach as being a virtuous resolution to these difficult problems are complicit in the general unwillingness to engage in meaningful change that will set the Commonwealth along a sustainable path.

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* Admittedly, they have provided actuarial value in the past, but as we move to capitated contracts, that value is diminished.