Yet another lawsuit against Hartford Healthcare (HHC) may seem obscure and limited to healthcare, but it goes much further. There is overwhelming evidence that prices for care at huge health systems like HHC are driving up healthcare prices for private health plans in Connecticut and it’s getting worse.
The third anti-trust lawsuit against HHC outlines how they get around a new law to prohibit anti-competitive behavior by luring independent practices into exclusive agreements that keep thousands of Connecticut physicians from contracting with more affordable plans. New research connects the broader impact of these price hikes with layoffs and other economic harms beyond healthcare. It’s a big deal.
HHC is a massive presence in Connecticut. According to HHC, they employ over 41,000 people at nearly 500 locations and generate $5.4 billion in revenue annually. HHC includes seven hospitals, several of which are the only hospital in their area. HHC also includes behavioral health facilities, ambulatory centers, urgent care centers, home care providers, rehab, and senior service providers.
The new lawsuit, brought by two Connecticut health plans, builds on two earlier suits against HHC, one on behalf of consumers and another by St. Francis, a competitor to HHC. All three allege that HHC uses its sizeable monopoly power in some areas of the state to limit competition and demand much higher prices across Connecticut. According to the complaint, residents in and around Meriden, Willimantic, Norwich, and Torrington only have access to an HHC-owned hospital. These are termed “must-have” hospitals. Insurers cannot offer plans to residents of those areas without paying HHC’s high prices.
But it’s worse than that. Even in Bridgeport and Hartford, where there are competitor hospitals, HHC can require that their hospitals and other facilities be included in insurer networks, even if they are higher priced and lower quality than competing hospitals, as a condition of getting the must-have hospitals. When they know they must be included, they can demand excessive prices.
It’s important to note that HHC’s monopoly powers only raise costs for private insurance and employer plans which have to negotiate prices with HHC. Medicare and Medicaid prices are set by the government and are not affected by HHC’s market leverage.
According to the latest complaint, HHC is also using its market power to block more affordable health plan options that are saving money for people in other states. Tiered plans give patients the option of using higher-quality, lower-price 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 placed on 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 anti-competitive conduct alleged in the litigation, tiered plans aren’t viable in Connecticut.
It’s not that the state hasn’t tried to fix this problem. A hard-fought law passed in 2023 made these anti-competitive contract clauses illegal. But the newest lawsuit explains how HHC gets around the law.
Integrated Care Partners LLC (ICP), a for-profit subsidiary of HHC, offers physician practices very lucrative benefits to join their network. Practices can only get referrals from HHC facilities if they join ICP. Providers who join ICP also get the higher HHC monopoly payment rates, far higher than they could negotiate independently. ICP practices also get access to expensive electronic medical record systems that are integrated with HHC hospitals and providers and access to exclusive surgical technology.
It’s a hard deal to resist. Currently, ICP includes 2,173 physicians and advanced practice providers in their network, a large proportion of all Connecticut providers. In many areas of the state, all the providers in several specialties are locked in the ICP network.
According to the newest lawsuit, in return for all these benefits, ICP requires their providers to exclusively contract with HHC and only refer to providers within the HHC network. This effectively prevents an insurer from assembling a viable, competing network that may offer lower costs and better-quality care to consumers and employers. Trapping care referrals and the profits within the HHC network reduces options and access to care for patients. 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 only serves to increase HHC profits and salaries.
While this lack of competition keeps healthcare unaffordable for Connecticut employers and consumers, new research finds that it also harms employment and the economic health of communities. In a paper published last month, researchers found that communities with higher healthcare prices due to monopoly health systems lost jobs outside healthcare as health benefit costs rose.
In addition to layoffs, wages decreased and tax revenue, to fund safety net services, dropped. The bigger the monopolies, the worse the impact on local economies. Not surprisingly, the researchers also found increases in community suicide and overdose rates. The impact was worst for workers making $20,000 to $100,000 per year. Claims by health systems of increased efficiencies from consolidation are not supported by the evidence.
The attorneys and plaintiffs who’ve brought these lawsuits are providing a key public service to make healthcare affordable here. And Connecticut lawmakers did the right thing passing a law last year to preserve competition and consumer choice. They all deserve our thanks and support.
But HHC seems to have found a way around the law. Hopefully, the combination of the lawsuits and legislative efforts to plug the holes will eventually result in sustainable access to affordable care and patients will have choices.
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