The money word during a panel discussion yesterday among health care executives was “market.” Market clout gives some providers an unfair advantage by allowing them to demand higher payments, said administrators of hospitals without that power. Market demand for the quality and brand name of such providers requires insurers to agree to the higher rates, a health plan CEO said. And most of the panels agreed that market forces – with a limited government “recalibration” – are the best mechanism to fix the disparities among health care payments to different hospitals and control costs.

“It is wishful thinking to say that the market is working by itself. It is not,” said Ellen Zane, president and CEO of Tufts Medical Center. “My comments today are remarkably similar to last year, because the market is remarkably the same.”

The panel discussion among health care executives came at a week-long summit on health care at Bunker Hill Community College. The discussion focused primarily on a study by the attorney general’s that found dramatic differences in the prices paid for the same services at different hospitals throughout Massachusetts. The study found little difference in quality among providers.

Prices vary in every market, the panelists agreed, but they said health care is different from tooth paste and automobiles because of government regulation, insurance products that give little incentive to shop around, and uniform consumer expectations.  “The expectation of consumers is to get the Cadillac,” regardless of the price, said Andrei Soran, CEO of MetroWest Medical Center of Framingham.

Gary Gottlieb, president and CEO of Partners Healthcare, the local health care behemoth and a provider that receives higher prices for its services, argued that price negotiations and quality of care were both more complicated than the attorney general’s study could capture. Partners, which includes Brigham and Women’s and Mass General, is widely criticized for using its “brand demand” and disproportionate market clout to negotiate high payments from private insurers. Opponents say this unfairly disadvantages and crowds out lower-cost, more efficient providers, driving up the cost of health care.

Gottlieb said comparing prices for individual services, as the attorney general’s study did, doesn’t fully reflect how payments are set. For example, he said payments for some services subsidize the cost of others, and recoup Partners’ higher overhead costs such as education and research. He said Partners plans for a profit margin of 2 percent.

He also described examples of quality and innovation that he said the study couldn’t measure. He noted Brigham’s plastic surgeon Bohdan Pomahac “has given four people their lives back with his remarkable work in face transplantation,” and cited advances in cancer treatment and Alzheimer’s research.

Many of the sickest patients from other hospitals are transferred to Partners facilities for “unique, life-saving treatment,” Gottlieb said. “There are costs associated with providing this level of care, but it also speaks to quality in a way no process measure ever could.”

Jim Roosevelt, head of Tufts Health Plan, said that there are the right reasons for price variation, like quality and complexity of care, and the wrong ones, like geography and size. But he said consumer demand for brand-name providers requires insurers to agree to higher rates for them. “These are market negotiations,” Roosevelt said. “We have to be able to compete.”

Norman Deschene of Lowell General Hospital, which received relatively low payments for its services in the attorney general’s study, said that higher payments to facilities like Partners gives those facilities greater resources for marketing budgets, new facilities and technologies, and staff recruitment, putting other providers at a competitive disadvantage. He said this creates a feedback loop where those with market power gain even larger market share and greater price-setting power, driving up costs.

Lowell General, despite being among the lowest paid health care providers in the state, earns higher profit margins than the 2 percent goal of Partners, said panel moderator Michael Bailit of Bailit Health Purchasing.

“Thank you for recognizing that,” Deschene said, laughing. He said the reason his hospital’s profit margins are higher is because heavy competition in the region has forced Lowell General to run its operations cost-effectively. He added that every time a patient chooses a local lower-cost provider, instead of travelling out of the region, the health care system as a whole saves money.

One solution suggested by some of the panelists was to reward consumers financially for choosing low-cost providers. “Consumers continue to flock to high-cost providers, because they have no need to do otherwise,” Zane of Tufts Medical said. Several panelists supported limited or tiered health care networks as a way to steer customers to lower-cost providers.

Soran of MetroWest said that while limited networks would be an improvement, they are “in some sense a work-around” that wouldn’t really end cost disparities, and that a limited government intervention to adjust fees might be a better solution.

The attorney general’s office has recommended temporary restrictions on how much payments may vary for the same service.

Other panelists also supported a “pointed, limited intervention” to reset price levels, but said market forces should subsequently be used to keep prices in check. “Once people are on the same, level playing field,” the market will function well, said Lowell General’s Deschene. He said that health care cost growth is already slowing down, and he doesn’t think the market would revert to dramatic price differences after an intervention.

Zane agreed with a limited state intervention and proposed setting a standard base fee schedule, either by law or by industry consensus. The base fees, Zane said, would then be adjusted through private negotiations to reflect quality and complexity of care, patient health status, and case mix (the proportion of patients receiving Medicare and Medicaid, which reimburse hospitals at lower rates than private insurers). These rates would be made public, Zane said, and “that transparency would keep the limits where they need to be.”

But Gottlieb of Partners said that he believes the problem is “underpayment,” when prices “don’t cover costs” for some hospitals. He said that payments to these hospitals need to rise, and that there is already downward pressure on the prices of high-cost providers.

CORRECTION: An earlier version of this story stated that Zane proposed a standard fee schedule based on private negotiations. Zane proposed setting a standard base fee schedule by law or industry consensus, with adjustments made through private negotiations to reflect certain factors.