Gov. Patrick mum on health luxury tax, says AG has tools to address market power

Boston — Gov. Deval Patrick delivered a wide-ranging speech on health care cost containment efforts in

Massachusetts but failed to take a clear position on what could become one of the more controversial points of

disagreement between the House and Senate: a hospital luxury tax.

Asked whether he could weigh in on the House’s plan to tax high cost providers and redistribute that money to

financially strapped community hospitals, Patrick joked, “Could I, or would I?”

He went on to suggest that the luxury tax might be unnecessary because he mistakenly believed the assessment would

be targeted to pay for a new oversight agency which he said he was “unconvinced” was needed.

Asked again about the luxury tax after the speech to the Greater Boston Chamber of Commerce, Patrick said, “I’m

going to reserve judgment until the final bill, but I expressed my concern about that inside.”

Attorney General Martha Coakley has identified price variation unconnected to quality of care as a major cost driver

of health care inflation, suggesting that the market clout and brand names of more prestigious institutions allow

them to charge more for services priced at lower rates by other providers.

“I said there’s more than one way to skin a cat. The idea of excess of market power is something that I and many,

many others have expressed concern about and the attorney general has tools right now which their office can use and

I assume they will,” Patrick told reporters after his speech.

An aide to Coakley did not have an immediate response to Patrick’s claims, saying he would look into the matter.

House Health Care Financing Chairman Rep. Steven Walsh told the News Service Tuesday afternoon that the luxury tax

was one way the House bill proposed to address market power discrepancies.

“I think we took the position that market power needed to be addressed in the bill and we did that, but we tried to

take the approach that this is more about quality. This isn’t just about money,” Walsh said. “It’s about quality

and we want to make sure we are quantifying our health centers that are the best in the world.”

Walsh repeated his hope that prices charged by providers will result in the tax never being assessed.

The Senate, which began debate on its cost containment bill Tuesday, did not include a tax on high-cost hospitals,

opting instead for a special commission to determine acceptable and unacceptable factors contributing to price

variation.

Gov. Deval Patrick delivered a wide-ranging speech on health care cost containment efforts in Massachusetts but

failed to take a clear position on what could become one of the more controversial points of disagreement between

the House and Senate: a hospital luxury tax.

Asked whether he could weigh in on the House’s plan to tax high cost providers and redistribute that money to

financially strapped community hospitals, Patrick joked, “Could I, or would I?”

He went on to suggest that the luxury tax might be unnecessary because he mistakenly believed the assessment would

be targeted to pay for a new oversight agency which he said he was “unconvinced” was needed.

Asked again about the luxury tax after the speech to the Greater Boston Chamber of Commerce, Patrick said, “I’m

going to reserve judgment until the final bill, but I expressed my concern about that inside.”

Attorney General Martha Coakley has identified price variation unconnected to quality of care as a major cost driver

of health care inflation, suggesting that the market clout and brand names of more prestigious institutions allow

them to charge more for services priced at lower rates by other providers.

“I said there’s more than one way to skin a cat. The idea of excess of market power is something that I and many,

many others have expressed concern about and the attorney general has tools right now which their office can use and

I assume they will,” Patrick told reporters after his speech.

An aide to Coakley did not have an immediate response to Patrick’s claims, saying he would look into the matter.

House Health Care Financing Chairman Rep. Steven Walsh told the News Service Tuesday afternoon that the luxury tax

was one way the House bill proposed to address market power discrepancies.

“I think we took the position that market power needed to be addressed in the bill and we did that, but we tried to

take the approach that this is more about quality. This isn’t just about money,” Walsh said. “It’s about quality

and we want to make sure we are quantifying our health centers that are the best in the world.”

Walsh repeated his hope that prices charged by providers will result in the tax never being assessed.

The Senate, which began debate on its cost containment bill Tuesday, did not include a tax on high-cost hospitals,

opting instead for a special commission to determine acceptable and unacceptable factors contributing to price

variation.