This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
A consultant hired to scrutinize Utah's health care market found no evidence that Intermountain Healthcare bullies competitors to the detriment of consumers.
Nor does IHC, the state's largest owner of hospitals and commercial health plans, appear to engage in unfair business practices such as subsidizing some services with favorable discounts or high profits from other services.
Overall, David Argue of Economists Incorporated says the health care system in Utah is characterized by "vigorous rivalry" and is a good deal for consumers. And he recommends that the Legislature leave it alone.
"Consumers are offered a variety of services that are generally considered to be of high quality and reasonably priced," Argue wrote. "Intervention by the Utah Legislature to promote competition in these markets is not necessary, and, as a general matter, competitive markets are more likely to be harmed than helped by regulatory directives." Well, he did have one suggestion: Lawmakers could do more, through promotion and dissemination of information, to let Utahns know just how good they have it.
Given that Argue's 250-page report, made public Friday, already cost taxpayers $300,000, a promotional campaign might be a long shot. But it is sure to enliven the already contentious, sometimes nasty, debate about diminishing access, rising costs and politics associated with health care.
The consultant was hired by the Privately Owned Health Care Organization Task Force, created last year by the Legislature to look at the health of Utah's health care system and, specifically, whether Intermountain Healthcare exploits its tax-exempt status and controls too much of the market. Greg Poulsen, senior vice president of Intermountain Healthcare and the company's primary conduit to the task force, was elated. He called the report "thoughtful, thorough, well-reasoned." "It says competition in Utah is vigorous and that we have high-quality physicians, hospitals and insurers. And while that competition brings out areas of disagreement, we shouldn't lose sight of the the fact that citizens of our state are well-served," Poulsen said.
"I don't know that I'd call it vindication, but I'm pleased the issues have been studied thoroughly and good reason has been brought to bear." The response from Regence BlueCross BlueShield of Utah, the second-largest insurer in Utah and IHC's most vocal critic, bordered on denial.
"Our hope continues to be that [the report] addresses the key question of how to improve Utah's broken health care system and provide Utahns access to high quality, reasonably priced care," Regence governmental liaison Jennifer Cannaday said in a statement. She noted that company executives had not yet reviewed the report in detail.
Nor had Roger Ball, director of the Utah Healthcare Coalition, a consumer advocacy group funded by a $45,000 grant from Regence.
But based on descriptions of the report, Ball was skeptical of some of its conclusions - most notably the part about adequate competition in the health insurance market. According to the report, IHC's SelectHealth and Regence insure 56 percent of Utahns covered by a commercial insurance plan.
"I find it difficult to imagine that consumers can be easily persuaded that because they have one or two options, with tons and tons of small print attached to them, that this is a fully competitive marketplace," Ball said.
Just how much weight the task force will give the report remains to be seen. But an e-mail survey of task force members, conducted last month by The Salt Lake Tribune, showed the majority of members believe it will be a primary tool in deciding what, if any, reforms are necessary. Sen. Michael Waddoups, task force co-chairman, said he wasn't surprised by some of the consultant's conclusions.
"I've always thought it was competitive and prices were conservative," he said. "But those aren't the only things we are charged with investigating." Waddoups, a Republican from Taylorsville, and Sen. Gene Davis, D-Salt Lake City, recently announced their desire for a joint federal-state investigation into unfair and monopolistic business practices in Utah's health care market. On Friday, Davis told The Tribune he might need to rethink that call to action in light of the consultant's report.
Both matters are on the agenda for Thursday's task force meeting.
Major findings of the study
A $300,000 study looked at competition within Utah's health care markets
* The health care system in Utah is functioning competitively and no new statutory or regulatory initiatives are recommended.
* "Regulatory actions ostensibly intended to benefit consumers are likely to benefit particular providers or insurers to the detriment of competition and to the detriment of consumer welfare."
* Giving favorable discounts to insurers that exclude competing hospitals and clinics, employing physicians and investing in new facilities are common practices in managed care markets.
* "Consumers [in Utah] have benefited from the vigorous rivalry that has generated these practices even though, as is common in competitive markets, individual payers and providers may have been harmed by those same practices."
* Separating IHC's hospitals and doctors from its insurance business would not resolve the concerns most expressed by competitors or make contract negotiations less antagonistic.
* "As long as SelectHealth (IHC's insurance arm) offers popular products, providers must contend with that fact in negotiations. Similarly, the attractiveness of IHC's provider network will be used in its negotiations with payers regardless of whether SelectHealth is IHC owned."
* The exclusion of certain providers, such as ambulatory surgery centers, from insurance networks harms the excluded providers, but it doesn't hurt competition or consumers.
* "Managed care plans have effectively used network exclusions to steer patients to the plans' preferred hospitals . . . If enrollees prefer health insurance products with unrestrictive networks, then those products will become most popular" and insurers will respond.
* IHC's ownership of insurance plans, hospitals and physicians - dubbed vertical integration - helps not hurts competition in Utah.
* "The creation of a non-IHC-oriented facilities network was in direct response to IHC's vertical integration."
* IHC does not appear to be using the profits of one business to subsidize or offer discounts through another.
* "The number and size of IHC's hospital and physician competitors indicate that any attempt to engage in a predation strategy - and no evidence has been observed to suggest that IHC actually engaged in such a strategy - has not succeeded and is unlikely to be successful in the future."