Report: Intermountain HealthCare Doesn’t Engage in Unfair Practices

Utah’s largest owner of hospitals and commercial health plans doesn’t appear to engage in unfair business practices, according to a consultant’s report.

In a 94-page study of the state’s insurance and hospital markets, as well as physician and other health-care services, analysts concluded that Utah offers competitive services in spite of the perceived dominance of Intermountain HealthCare.

“In sum, health-care markets are serving the interests of consumers by forcing suppliers of health insurance and health care provider services to offer the most attractive combinations of price and quality,” the report says.

The report was commissioned by a legislative task force charged with evaluating the delivery of health care in Utah.

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.”

The Privately Owned Health Care Organization Task Force was born out of a 2005 legislative effort to tax and later break up Intermountain HealthCare. Early task force meetings focused almost entirely on allegations that the nonprofit organization’s business practices stifle competition by pricing others out of the system and leaving no room for non-IHC doctors.

But the report released recently said the opposite.

“Rather than precluding entry, IHC’s vertical integration stimulated a competitive response that is motivated to match the quality, access and price of IHC’s system,” the report states.

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 fact that citizens of our state are well served,” Poulsen said.

Task force members said they hope the report will open the door to a look at broader policy questions, such as the growing rate of uninsured Utahns and double-digit inflation in health care costs.

“What this is telling us really is: Don’t launch a grenade in the middle of your health care system,” said Sen. Gene Davis, D-Salt Lake. “Now we know the lay of the land, we know that, according to this report, there are no bad guys, that everybody’s doing their job, but I think there are still some questions that need to be answered.”