A preliminary report from Massachusetts Inspector General Martha Coakley has found practices that "reinforce and perpetuate disparities in pricing" have created equity problems in the that state’s commercial healthcare marketplace.

“The practice raises concerns that disparities in reimbursement will create a provider marketplace dominated by very expensive 'haves' as the lower and more moderately priced 'have nots' are forced to close or consolidate with higher paid systems."

The report said that health insurers paid Massachusetts hospitals within the same geographic area significantly different prices for similar services. Those pricing variations could not be explained by quality of care, complexity of patient populations, Medicare or Medicaid populations, or whether the hospital is a teaching or research facility. Pricing difference could not be correlated to variation in hospitals’ costs for delivering services.

"Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers," according to the report.

"Price increases, not increases in utilization, have caused most of the increases in healthcare costs during the past few years in Massachusetts."