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Analysis | Hartford Healthcare’s Latest Lawsuit Adds Critical Twist

ELLEN ANDREWS

The latest lawsuit against Hartford Healthcare (HHC) may seem vague and limited to health care, but it goes much further. There is overwhelming evidence that the prices of care in massive health systems like HHC are driving up the prices of care in Connecticut’s private health plans, and it’s getting worse.

A third antitrust lawsuit against HHC details how they’re skirting a new law banning anticompetitive behavior by enlisting independent practices in exclusivity agreements that prevent thousands of Connecticut doctors from signing with more affordable plans. New research links the broader impact of these price hikes to layoffs and other economic harms that go beyond health care. This is serious business.

HHC is a huge presence in Connecticut. According to HHC, they employ more than 41,000 people in nearly 500 locations and generate $5.4 billion in revenue annually. HHC includes seven hospitals, several of which are the only hospital in the area. HHC also includes behavioral health facilities, outpatient centers, urgent care centers, home care providers, rehabilitation and senior services providers.

The new lawsuit, filed by two Connecticut health plans, builds on two earlier lawsuits against HHC, one on behalf of consumers and the other filed by St. Francis, an HHC competitor. All three claim that HHC uses its significant monopoly power in certain areas of the state to limit competition and charge significantly higher prices throughout Connecticut. According to the complaint, residents of Meriden, Willimantic, Norwich and Torrington have access only to an HHC-owned hospital. These are referred to as “must-have” hospitals. Insurers cannot offer plans to residents of those areas without paying HHC’s high prices.

But it gets worse. Even in Bridgeport and Hartford, where there are competing hospitals, HHC can require that their hospitals and other facilities be included in insurers’ networks, even if they are more expensive and of lower quality than competing hospitals, as a condition of getting the hospitals they need. When they know they have to be included, they can charge exorbitant prices.

It is important to note that HHC’s monopoly powers only raise costs for private insurance and employer plans, which must negotiate prices with HHC. Medicare and Medicaid prices are set by the government and are not subject to HHC’s market leverage.

According to the latest complaint, HHC also uses its market power to block more affordable health plan options that save people in other states money. Tiered plans give patients the option of using higher-quality, lower-priced providers at a lower cost to them. Patients can still choose to access care from lower-tier providers; they just have to pay more.

But Connecticut doesn’t have tiered plans because HHC uses its monopoly power to get better tiers than they deserve, based on price or quality. Tiered plans can save patients money, lower everyone’s insurance premiums and improve the quality of care while preserving consumer choice. But because of HHC’s anticompetitive conduct alleged in the lawsuit, tiered plans are not enforceable in Connecticut.

It’s not that the state hasn’t tried to fix the problem. A hard-fought law passed in 2023 made these anti-competitive contract clauses illegal. But the latest lawsuit explains how HHC is skirting the law.

Integrated Care Partners LLC (ICP), a for-profit subsidiary of HHC, offers medical practices highly lucrative benefits for joining its network. Practices can only receive referrals from HHC facilities if they join ICP. Providers who join ICP also receive HHC’s higher monopoly payment rates, significantly higher than they could negotiate independently. ICP practices also receive access to expensive electronic medical records systems that are integrated with HHC’s hospitals and providers, as well as access to exclusive surgical technology.

The offer is hard to resist. ICP currently has 2,173 physicians and advanced practice providers in its network, a significant portion of all providers in Connecticut. In many areas of the state, all providers in several specialties are locked into ICP’s network.

According to the latest lawsuit, in exchange for all these benefits, ICP requires its providers to contract exclusively with HHC and refer only to providers within the HHC network. This effectively prevents the insurer from building a cost-effective, competitive network that can offer lower costs and better quality care to consumers and employers. Trapping referrals for care and profits within the HHC network limits patients’ options and access to care. While ICP affiliates may not technically be employees of HHC, they are bound by HHC’s exclusionary policies. According to the complaint, this lack of competition constitutes illegal price fixing and serves only to increase HHC’s profits and wages.

While this lack of competition makes health care unaffordable for Connecticut employers and consumers, new research shows it also hurts the community’s employment and economic health. In a paper published last month, researchers found that communities with higher health care prices due to monopolistic health care systems lost non-health care jobs as health care costs rose.

In addition to layoffs, wages have fallen and tax revenues that fund safety-net services have fallen. The bigger the monopolies, the worse the impact on local economies. Not surprisingly, researchers also found rising suicide and overdose rates in communities. The worst impact was felt by workers earning $20,000 to $100,000 a year. Health systems’ claims of increased efficiency from consolidation are not supported by the evidence.

The attorneys and plaintiffs who brought these lawsuits provide a critical public service to make health care affordable here. And Connecticut lawmakers did the right thing by passing a law last year to preserve competition and consumer choice. They all deserve our thanks and support.

But HHC has apparently found a way around the law. Hopefully, the combination of lawsuits and legislative efforts to plug the holes will ultimately lead to sustainable access to affordable care, and patients will have a choice.


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