cost of care


Report: In Mass. Health Care, System Skewed So Rich Get Richer

A report released today by the Healthcare Equality and Affordability League (H.E.A.L.) — a partnership between the for-profit Steward Health Care System and the union, 1199 SEIU United Healthcare Workers East — finds that disparities in hospital costs and financing across the state are driving “a vicious cycle” of inequality in health care.

The result, according to this analysis, is that medical care is becoming less affordable for lower-and middle-income families in Massachusetts, and the disparities in hospital financing are “compromising the viability of community hospitals.”

The group is calling for new, and what they call more “fair” reimbursement rates so that poorer, community hospitals (with a greater proportion of Medicare and Medicaid patients compared to the higher-cost Boston teaching hospitals) can continue to serve the lower-income patients, among other financial recommendations.

David Williams, president of the Boston consulting firm Health Business Group, who was paid by H.E.A.L to research and co-author the report, says: “What hasn’t been demonstrated before is what impact these financing disparities have on communities and community hospitals.”

He notes: “The hospitals that have the highest percentage of publicly funded patients, they get paid less, but in addition to that, those hospitals also get the lowest commercial rates — because they’re not in as strong a position to negotiate — so that means that they’re doubly disadvantaged…it means that the hospitals serving middle-class and lower income communities don’t have the resources to compete effectively with those hospitals that get higher reimbursements.”

Clearly, the group’s recommendations would benefit the Steward-owned hospitals, Williams acknowledges, but, he adds: “it would also help with the state’s overall approach to cost containment.

I asked Nancy Turnbull, an associate dean at the Harvard School of Public Health, to take a look at the report and here’s what she had to say:

…This report looks to be raising critical issues regarding payment disparities. We’ve known for years, from the work of the [Attorney General], [Center for Health Information and Analysis] and others that these disparities exist and are, in many cases, getting worse. So far, we’ve done little to address them, and the effect these disparities have on lower paid providers and the patients for whom they care. However, I don’t think the solution is, in most cases, to just increase the rates of payment for poorly paid providers, although that is a needed action for some. We also need to talk about reallocation of existing payments, and about costs. I am supportive, to some extent, of giving consumers reasonable financial incentives, based on their income, to use lower cost providers—although lower paid is not the same as lower cost–but we also need approaches that are systemic. Consumers in tiered and high deductible health plans aren’t going to solve this problem without tough action by state government and other payers, including, in my opinion some regulation of rates of payment. And most tiered networks available so far are regressive — they impose higher costs on lower-and moderate-income people. They address one form of inequality by creating another.

Among the findings, according to the H.E.A.L press release:

“The rich get richer as highest cost hospitals attract a greater proportion of patients with commercial insurance, which have higher reimbursement rates than Medicare and Medicaid.”

(H.E.A.L report)

(H.E.A.L report)

–“Patient migration for routine care from community hospitals to high cost Boston teaching hospitals increases total medical costs and contributes to higher premiums for all individuals and families with commercial insurance (non-Medicare nor Medicaid). Additionally, low-income patients, forced to travel greater distances to receive routine care are more likely to forgo treatment until conditions become acute and require more expensive interventions.”  Continue reading

When Nursing Homes Are No Longer The Last Stop For Patients

Two years ago, Dorothy Holmes, then 75, was in the cozy pink bathroom of her mobile home getting ready to shower when she fell. It’s the type of accident that’s pervasive among older Americans — and it’s often the very thing that triggers the end of independence.

“I got a big spot on my head, it almost conked me out,” Holmes said in her soft voice.

She heard her husband come down the hall, “and when he turned the corner all I heard was, ‘Oh God, honey, what did you do now?’ After that I don’t know anything cause I passed out,” Holmes recalled.

Dorothy Holmes shortly after her fall. (Courtesy)

Dorothy Holmes shortly after her fall. (Courtesy)

Holmes spent almost three months in a hospital near her home in Belchertown, Mass. Her heart stopped a few times, she had breathing and memory problems, and doctors removed an ulcer as big as a grapefruit. Even with continuous nursing care, the wound wouldn’t heal.

“Every day the girls came in and changed it and cleaned it. Then I had to take,” Holmes paused, “what do you call it when they help you learn to walk and everything?”

Physical therapy — which continued for more than a year in a nursing home. These days, patients are often transferred from a hospital to a nursing home to recover. But some never leave.

“The only thing I worried about was not getting out. I kept saying to him and one of my daughters, ‘You’re not going to keep me here are you?’ ”

Holmes worried her children and her husband wouldn’t be able to handle her care at home. Continue reading

Caring For Kevin: An Autistic Man, An Exceptional Doctor, A Life Renewed

Kevin Fitzgerald, after surgery, his vision restored (George Hicks/WBUR)

Kevin Fitzgerald, after the second of two eye surgeries, with his vision restored (George Hicks/WBUR)

By Rachel Zimmerman

Kevin Fitzgerald is parked in a wheelchair near a set of elevators at Boston Medical Center, tense with fear.

He’s a big guy, nearly six feet and about 280 pounds. But because of his severe autism, Kevin can’t verbalize his thoughts. He can only moan.

Dressed in her scrubs, Dr. Susannah Rowe, Kevin’s eye surgeon, sits on the floor next to him. While waiting for a heavy dose of anti-anxiety meds to calm her patient, Rowe practices what she calls “verbal anesthesia.” “It’s OK to be afraid,” she tells Kevin. “Want to hold my hand?”

Institutionalized since childhood, Kevin, now 56, has been losing his sight for the past two years to the point that doctors said he can see little more than shadows. He’s here at BMC awaiting cataract surgery, a fairly simple procedure that generally takes about 30 minutes in the operating room. But for Kevin, who has long feared doctors and has a history of aggressive, unpredictable behavior — like hitting himself or inadvertently hurting others or running away when he’s in distress — the procedure isn’t simple at all.

Surgeon Susannah Rowe, anesthesiologist Oleg Gusakov, M.D. and nurse anestheticst Dale Putnam, CRNA, prepare Kevin for surgery. (George Hicks/WBUR)

Dr. Susannah Rowe, anesthesiologist Oleg Gusakov and nurse anestheticst Dale Putnam in the pre-op room with Kevin. (George Hicks/ WBUR)

It’s not simple for the doctors, either. They’re practicing a special art: medical care for the disabled and mentally ill. It often breaks the rules of traditional care, loses money for their practices and can even put them at physical risk if a frightened patient spins out of control.

But there’s a huge need for such specialized care. As many as 50 percent of people with intellectual disability (defined as an individual with an IQ of 70 or less and difficulty functioning in daily life, among other criteria) have vision problems, according to state experts. And a far higher proportion of these disabled patients have severe vision problems compared to the general population.

With delayed or limited access to treatment, these men and women can begin to lose their already-tenuous connection with the physical world; and their behavior, driven by fear and the inability to understand why things are growing darker, can deteriorate further toward what looks like aggression. Rowe, the surgeon, says anyone with a disability or severe mental illness whose mood, anxiety or behavior gets worse should immediately have their vision checked.

Join doctors in the operating room for Kevin’s surgery. Warning: It gets graphic.

Kevin’s situation may seem exceptional but he’s not alone. According to the state Department of Developmental Services, there are about 32,000 adults and children with intellectual disability (what used to be called mental retardation) eligible for services in Massachusetts. About 9,000 of these adults live in group homes.

But not everyone with an intellectual or developmental disability is getting the care they need, experts say. Consider:

  • A recent Massachusetts study found that people with autism still face significant barriers in accessing medical care, and it’s worse for patients like Kevin, who can’t fully communicate.
  • A 2009 survey of eye specialists from around the state found that while most providers believe patients with intellectual disabilities require 30-60 minutes longer for a medical appointment, the vast majority of the specialists didn’t allot that extra time.
  • According to a 2004 Public Health Reports article: “Research indicates that most individuals with developmental disabilities do not receive the services that their health conditions require…[and] individuals with mental retardation face more barriers to health care than the general population.

Research has also demonstrated that many primary care providers are unprepared or otherwise reluctant to provide routine or emergency medical and dental care to people with developmental disabilities.”

Andrew Lenhardt, a primary care doctor in Hamilton, Mass., who treats many disabled patients, including Kevin, says: “The level of dignity and respect and basic medical care that’s given to people with disabilities is often meager…These people can’t advocate for themselves, they’re an easy target to be treated inadequately or poorly.”

Continue reading

NBC: Cost Of Medical Treatment For Bomb Victims May Be Millions

When someone you love needs critical medical care, cost is generally not even a consideration. And it shouldn’t be.

But at a certain point, reality seeps back in and the bills must be paid.

So here’s NBC providing an early (and rough) reality check, estimating that the price tag for treating Monday’s Marathon bombing victims “may reach or surpass $9 million.”

Police clear the area at the finish line of the 2013 Boston Marathon as medical workers help injured following the explosions. (Charles Krupa/AP)

Police clear the area at the finish line of the 2013 Boston Marathon as medical workers help injured following the explosions. (Charles Krupa/AP)

How’d they get to that number?   Part of the calculation was based on the 2011 Tucson shootings that killed six people and wounded 18, among them former U.S Rep. Gabby Giffords:

“…health-economist Ted Miller calculated that the average cost for a person injured by gunfire [in Tucson] was $48,610 – or about $50,000 in 2013 dollars.

“One of the commonalities with that and what happened in Boston is that gunshot wounds these days are very often multiple rounds, and the blast injuries were probably multiple injuries (due to shrapnel) that tended to enter multiple parts of the body,” Miller said.

“It’s probably on the magnitude of $40,000, $50,000 (per person for emergency-room care). But for the people who will be hospitalized for weeks, you could easily be looking at $150,000 to $200,000 per person,” he said.

For those who have lost limbs, prosthetics are pricey: $14,187 for a partial foot, $16,690 for a lower leg, and $45,563 for a full leg, according to a 2010 report by the Journal of Rehabilitation Research & Development. Continue reading

Health Affairs: Many Don’t Know They Can Get Preventive Care Free

Here’s my suggestion for holiday lights over the White House: Big neon letters that read: “You can now get lots of preventive care with no out-of-pocket costs!”

Under the federal health reform known as Obamacare, preventive care like check-ups and vaccines must now be largely free, and insurance companies may not charge co-pays for much of it. (Actually, it’s more nuanced than that, as my far more knowledgeable readers Amy Lischko and Dennis Byron explain below, and I altered my neon message above in response.)

In any case, a great many people do not know which preventive care is now free to them; a poll last year found that more than 40% of Americans did not know that Obamacare bans “cost-sharing” for preventive care. And the trouble is, if you don’t know preventive care will cost you nothing out of pocket, you may not get it, and thus fail to reap the benefits of staving off illness before it hits.

A new study just out in the journal Health Affairs finds a similar “people-don’t-know-what’s-free” problem with high-deductible health insurance called “consumer-directed” plans. The title says it all: “In Consumer-Directed Health Plans, A Majority Of Patients Were Unaware Of Free Or Low-Cost Preventive Care.” From the press release:

Patients in high deductible consumer-directed health plans avoid preventive care due to unnecessary fears over cost. Consumer-directed plans typically exempt recommended preventive visits and tests from the plan’s deductible, or require only a small copay. These plans have grown in popularity, increasing to 19 percent of all covered workers in 2012 from 8 percent just three years prior. Mary E. Reed, of the Kaiser Permanente Northern California Division of Research, and coauthors found that more than half of the 456 Northern California-based respondents surveyed did not understand their plan benefits for preventive office visits and approximately one in five delayed or avoided a preventive visit, test, or screening because of cost. Continue reading

Analysis: Misconstrued Conclusions On State Health Law Costs


The great thing about blogging is that you can fix stuff really fast.

So here goes:

Yesterday we linked to a story in The Boston Herald about a report on state health reform by researchers at Yale and The Wharton School.

Today I got email from Jeff-Levin Scherz, who blogs on Managing Health Care Costs, setting the record straight. He writes: “The Herald article on the Wharton/Yale research on MA health care reform that you highlighted yesterday totally misconstrued the conclusions.”

Here’s his post in its entirety:

Here’s the first paragraph of an article from the Boston Herald abstracted by CommonHealth yesterday:

“The nation’s anemic economic recovery could suffer a brutal blow at the hands of Obamacare, critics say, as a new study shows mandated health care in Massachusetts cut $6,000 from some Bay State residents’ annual pay.”

Here’s the conclusion from the actual paper.

“Our results suggest that mandate-based reform has the potential to be a very efficient approach
for expanding health insurance coverage nationally.”

The same researchers previously reported that health care reform in Massachusetts decreased the number of uninsured, and: Continue reading

ER Spending: More Is Better, Study Finds

Research found that increased hospital spending in the ER led to decreased mortality

An MIT economist studying tourists rushed to emergency rooms around Florida came to this conclusion: when it comes to emergency care for heart problems, you get what you pay for (or at least what your hospital has paid for).

The economist, Joseph Doyle, of MIT’s Sloan School of Management found that an increase of about $4,000 per patient in hospital spending led to a 1.4 percent decrease in the mortality rate. “The high spending hospitals in areas in Florida have lower mortality in what I consider comparable patients,” he said.

It might seem intuitive that investment in emergency care yields better health outcomes, but it’s a topic of hot debate, Doyle notes. (Think Atul Gawande in The New Yorker, and his pivotal piece on McAllen, Texas, which found that greater spending in various regions of the country doesn’t necessarily lead to better health.)

Doyle said that by studying ER visits by patients in Florida from out-of-town, you can reduce substantially the confounding factor of local patient variation that might otherwise occur. In his study, published in the American Economic Journal: Applied Economics, and condensed here by the MIT News office, Doyle looked at patient discharge data from nearly 37,000 hospitalizations between 1996-2003:

Doyle analyzed the patient data by ZIP code, age and even seasonality of visit to make sure that he was studying demographically similar tourists being treated throughout Florida.

Moreover, Doyle notes, Florida has significant “variation in how areas treat patients after heart attacks. Florida looks like a microcosm of the U.S., with high-spending and low-spending areas. And the per-capita income of an area is not correlated very well with [hospital] spending.” In Fort Lauderdale, for example, hospitals spend 30 percent more on heart patients than they do in nearby, affluent West Palm Beach. Continue reading

A Call To Freeze Health Insurance Premiums

Dan Smith, senior pastor at First Church Congregational in Cambridge and Sarah Higginbotham say outrageous premium increases must stop. (Photo/Martha Bebinger, WBUR)

WBUR’s Martha Bebinger reports:

Sarah Higginbotham has a health insurance story that is becoming all too familiar. Three years ago, when she was still single, she took home $900+ every other week from her part-time job, after paying her share of her health insurance premium. Then Higginbotham got married, had a child and switched to a family plan.

“My paycheck has dwindled to $164 every two weeks,” she says with a look that shows she still can’t quite believe it. “Basically I’m working for my health insurance here.”

Higginbotham’s dramatic drop in take home pay wasn’t just a result of moving from individual to family coverage. Her employer, First Church Congregational in Cambridge, saw premiums rise 17% this year, an increase senior pastor Dan Smith calls outrageous.

“People who have felt that the market could somehow regulate it (insurance rates) are being proved wrong right now,” says Smith, his deep voice rising. “When we sit down with some of the leaders in the health care industry, we wonder if they do feel the pain that some of us are feeling.”

To share the pain, the Greater Boston Interfaith Organization (GBIO) and Health Care for All are proposing what they call a bold step. They want a one year statewide freeze in the cost of health insurance.

“The current escalating costs of health care are unsustainable,” says Health Care for All director Amy Whitcomb Slemmer. “So we are asking all the interested parties to take a time out until we can get to a more comprehensive solution.” Continue reading

With Growing Call To Limit Health Costs, Lawmakers Consider Caps

Here’s WBUR’s Martha Bebinger’s take on emerging legislation to control medical costs:

There’s a growing call for the state to set limits on how much health care costs rise each year. House and Senate leaders joined the call yesterday, signaling that the bill they’re drafting will keep health care spending in Massachusetts in line with inflation or a similar economic measure.

House chairman of the Joint Committee on Health Care Financing, Steven Walsh, says holding spending increases in the range of 3 ½% is achievable and would give insurers, doctors and hospitals predictability.

“We’d look at a system that is very clear about what’s expected of them (insurers and providers)” says Walsh. We’d say, “we want you to achieve a certain goal within a certain period of time that would be negotiable. If you don’t achieve that, perhaps that’s when it should trigger an intervention to help move the market in the direction we think it needs to go to increase quality and save money.”

Walsh says the committee is still discussing how the state would intervene if costs rise above the cap. He and other committee members have grown tired in recent months of hearing from hospitals that are in the red and insurers who say they are just breaking even, while insurance premiums continue to rise 8-10% or higher.

Walsh’s Senate co-chairman Richard Moore says the bill will likely set quality targets to make sure hospitals and doctors focus on improving care while lowering costs. Moore agrees with Don Berwick that we are spending enough money on health care already but need to figure out how to spend more efficiently. Continue reading

Poorer Patients Help Subsidize Health Care For The Rich, Coakley Report Finds

Tucked into Attorney General Martha Coakley’s exhaustive investigation of the drivers behind escalating health care costs in the state is a startling, new and counterintuitive finding: the richer you are, the more your insurer is probably spending on your health care. And the poor are helping to foot the bill.

Indeed, the report says, it appears that lower-income people are subsidizing the higher-cost care of the wealthy — the Chelseas of the state lending a hand to the Wellesleys, in effect.

As far as the attorney general’s office knows, this is the first such analysis in the nation.

In what counts as a glimmer of irony in an otherwise serious document, the report says:

While we did not uncover any relationship between TME (total medical expense) and payment method, we did uncover a relationship between TME and patient income.

The relationship is this: “More money is being spent on the patients from higher income zip codes” and “those with lower TME may be
subsidizing the higher cost of care of those with higher TME in the same risk pool.”

To come to that conclusion, the attorney general gathered information from the state’s top three health insurers — Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim HealthCare and Tufts Health Plan — on their members’ spending by zip code, and compared it to data from the IRS on average income. They found that the higher income zip codes had higher total medical spending, which includes what insurers spend on care plus the patients co-pays and deductibles. This spending, the report notes is “not explained by the member being sicker or older” and it doesn’t include services such as purely cosmetic surgery.

The attorney general found the same pattern among the commercial members of all three big insurers: the total medical spending for higher-income patients tends to be far higher than the total medical spending for lower-income patients. For instance, a Blue Cross member living in a tonier area like Wellesley with a six figure income is spending $437 per member per month on health care. That’s compared to a member living in a neighborhood like Chelsea, where incomes are considerably lower, who is spending $320 per member per month, according to the report. And both consumers, the richer and the poorer, are likely paying comparable premiums.

Interestingly, when investigators examined the data by region, they found the relationship between level of health care spending and patient income to be strongest in three areas: Metrowest, Northeastern Massachusetts, and Boston and its surrounding towns.

So what’s going on here? While there’s a stereotypical notion floating around that poor people burden the health care system with overuse, and therefore cost more, it turns out in Massachusetts at least, the opposite seems to be true.

The report says that in general, two factors drive differences in spending: price (richer people are using pricier providers) and use (the wealthier are using more health care services.) Continue reading