Utah to study large health systems

Lawmakers in Utah want to take a close look at how dominant integrated health systems affect health care in the state. Particularly, how Intermountain Health Care affects health care in the state.

The state Legislature March 2 gave final approval to a bill that would establish a task force to study, for the next two years, the market penetration, geographic distribution and contracting arrangements of integrated health systems in the state. The 15-member panel would also study the impact of divesting such systems, how their business practices affect competition and several other health care-related issues.

Though the bill does not specifically name any organizations, Intermountain Health Care is the only integrated health system in the state. The Salt Lake City-based system owns 19 of Utah's 53 hospitals, employs 550 of the 4,300 practicing physicians and insures 450,000 people -- about 19% of the population.

The bill, which at one time sought to tax the health system and make it divest its insurance division, was born out of concerns that Intermountain has too much market power in Utah. Similar criticisms have been raised at other integrated health systems nationwide.

"There's an age-old debate in looking at consolidation in health care. You can often make an argument that the clinical integration is good, but you worry that there won't be as much price competition. You can make arguments for both things," said Gary Claxton, vice president of the Menlo Park, Calif.-based Kaiser Family Foundation, a nonprofit foundation that studies health care issues.

Claxton said the concern that Intermountain's dominance gives it too much control over pricing may be tempered by the fact that it is a nonprofit organization.

"In terms of pure market dynamics, [the system] probably can get relatively high prices from payers," he said, "but if that money is being put back into community needs, maybe that's what the community wants."

Intermountain spokesman Daron Cowley said integrated systems have the advantage of allowing physicians, hospitals and health plans to work together for the benefit of the patient. "There's a coordination there that's difficult to achieve when the three entities are separate," he said.

Claxton said Intermountain is supportive of the task force study and looks forward to seeing the concerns addressed with hard data.