Friday, September 17, 2010

Are Large Health Care Systems Gouging Patients?

With patients having to pay more of what's charged for their health care, comparisons between medical systems like this one in Pennsylvania, makes us wonder if bigger necessarily means better:
The Pennsylvania Health Care Cost Containment Council study looked at four regional hospitals that offer cardiac surgery: Geisinger Wyoming Valley, Plains Twp.; Community Medical Center and Mercy Hospital, Scranton; and Pocono Medical Center, East Stroudsburg.

Among the four, Geisinger Wyoming Valley carries the biggest price tag. In 2008, the average hospital charge for a coronary artery bypass graft surgery was $108,029 and the average hospital charge for valve surgery was $132,740, according to information in the report.

Having both surgeries simultaneously at Geisinger resulted in an average hospital charge of about $162,051.

Coming in as the most affordable in 2008 was Community Medical Center, according to the council's report. The average hospital charge that year for bypass surgery was about $63,767, and the average hospital charge for a valve surgery was $90,411.

Pocono Medical Center was the most affordable when it comes to having simultaneous bypass and valve surgeries - the average hospital charge was $92,352.
Hospital charges are a poor way to compare costs since they are often inflated. Worse, retrospective data that is several years old is of little use to patients seeking care today. But as patients are left to pay more and more out-of-pocket for their care, these types of data might tarnish patients' love-fest for large "branded" health care systems that historically have used their brand and market share to raise prices.

At least that's the hope to our more ardent reformers.

But there is the political reality that hospitals are large employers. Also, they are slow to publish this information lest they show their hand to insurers with whom they negotiate group prices or risk discouraging their patients from using their shiny new facilities up front. This is why patients have a tough time determining what a procedure will cost before they have it.

If we were to continue to permit personal costs to loom larger in our new health care reform era, as larger health systems' catchment areas overlapped it would be likely that the institution that moved first and most aggressively to make cost data available prospectively while maintaining quality might be the one with a significant advantage over their non-disclosing competitors.

But the costs and consequences of such an approach is unacceptable to our professional politicians. Things must be kept "easy" and "painless" for their constituents. As such, patients will soon have even less skin in the game for their care as we move forward with the "Affordable" Care Act in 2014, allowing this ridiculous, unrelenting upward cost spiral will continue. Bundled government payments for services won't be enough since they'll likely be negotiated to keep prices artifically inflated.

Don't think so?

Just look at the construction going on right now at area hospitals around the country. I would say our big, branded hospital systems are loving their prospects in the years ahead.


1 comment:

Pittsburgh Health Rates said...

I'm surprised. Geisinger has historically been a low cost provider of health insurance with an emphasis on cost containment.

Their rates are still competitive and they are a popular regional (not National) carrier.