costs of care

Study: More Empowered Patients Can Mean Higher Medical Costs

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Does this mean we can’t have it both ways? As patients, we’d like more say in our medical care. We’d also like the astronomical costs of care to come down. But here’s the Los Angeles Times headline: Patients who helped with medical choices had higher bills: study.

The story describes a study just out in the journal JAMA Internal Medicine that found that involving patients more in medical decisions can lead to longer hospital stays and higher costs — quite a bit higher. (See the journal’s video interview with the author here.) The numbers:

Analyzing the data, the researchers found that nearly all — 96.3% — wanted to receive information about their illnesses and treatment options, but that only 28.9% said they had a strong preference for making their own decisions about their care.

Those patients had longer hospital stays, by about a quarter of a day on average, than patients who preferred let their doctors take the lead. They also had greater hospital costs ($865 more, on average.) By and large, people who were more likely to participate in medical decisions were better educated, and more likely to have private insurance coverage, than the rest of the patients who were surveyed.

To put the finding in perspective, the team calculated that multiplying the 28.9% of patients by the 35 million hospitalizations in the U.S. each year yielded 10 million hospitalizations. If each represented an additional quarter of a day and $865, the impact would total 2.6 million hospital days and about $8.7 billion in costs.

Ouch. Readers? Is it still the right thing to do? Is there some way to have it both ways?

FILED UNDER: Money, costs of care

May 8, 2013 | 12:39 PM | Carey Goldberg

New Fed Data Show Hospital Prices Vary Wildly: The Mass. Version

View map in a larger map

(Data visualization above: Alex Kingsbury, WBUR)

Today is a glorious day for health care wonks who see great founts of Medicare numbers as enticing Big Data playgrounds just begging for the analytical equivalent of gymnastics on the monkey bars.

The federal government has just released hospital prices on 100 common procedures, and though many studies have already documented the dramatic cost variation among hospitals — here’s a recent one — the numbers have never before been this accessible. The Washington Post does a wonderful job of providing context and translating some of the data into visual form here, including a useful feature titled “How much do providers charge in your state?”

Of course I provincially plugged in Massachusetts, and was surprised to see that though we’re reputed to have among the highest costs in the country, we’re below the national average on the 10 categories shown, ranging from pneumonia to heart failure.

WBUR’s Alex Kingsbury puts his data-visualization talents to excellent use on the Medicare data in the map above, showing the variation in costs for treating one condition, Chronic Obstructive Pulmonary Disease, at each of the state’s hospitals. They range from $8,918 to $52,729. [More on these striking gaps from WBUR's Martha Bebinger here: Crazy, irrational hospital billing (with no connection to quality.)]

Above, click on each blue pin to see what each facility charges. Or if you’re not a geographical type, you can check out the raw Medicare numbers here, and here’s a list of the data points Alex used: Continue reading →

FILED UNDER: Insurance, Medicine/Science, Money, costs of care, hospital prices

May 6, 2013 | 11:22 AM | Carey Goldberg

Mass. Poll: Health Costs Feel Heavier Than Ever, Yes To Price Tags

Source: Mass Insight / Opinion Dynamics

You may already know all too well that the cost of health care, whether in premiums or co-pays or deductibles, seems to weigh down your budget more heavily with each passing year. But the chart above tells you that if that budgetary load is feeling more burdensome than ever before, you’re not alone.

Every spring, the Boston consulting and research firm Mass Insight runs a health care “affordability” poll, and this year’s is just out today. From the press release:

Since 2004, the Mass Insight / Opinion Dynamics Healthcare Affordability Index has tracked how much of a cost burden residents feel from premiums, co-pays, prescription drugs, and deductibles. Results are calculated into a single Index score, which measures the level of affordability people feel toward their healthcare. Results from the spring 2013 poll show the lowest score ever recorded on the Index, 109, meaning Massachusetts residents feel their healthcare is becoming less affordable and more of a financial burden.

The poll of 450 Massachusetts residents, conducted in late April, found that its “affordability index” dropped 10 points in just the last year.

Might the 2012 Massachusetts health cost-containment law help at all? At the very least, the poll found eagerness among respondents for one aspect of the new law: its promise of greater health care “transparency” to make it easier for consumers to obtain price information. Continue reading →

FILED UNDER: Insurance, Money, Personal Health, costs of care

March 22, 2013 | 9:31 AM | Carey Goldberg

The Big Lesson From Brill’s ‘Bitter Pill’ Story, ‘So Big It’s Hard To See’

Time’s “Bitter Pill’ cover

I stopped in to get my car fixed yesterday and found the recent Time issue featuring Steve Brill’s mega-story — Bitter Pill: Why Medical Bills Are Killing Us — still lingering on the waiting-room table, well-thumbed and dog-eared. For a story about a problem that just about everyone already knew existed, the piece has clearly been having a major impact and sparked widespread discussion.

Today, the Cambridge-based Institute for Healthcare Improvement posts a lively and provocative piece that concludes that the current payment system is broken and must be blown up to create one that “incents value improvement.” Written by Jeff Selberg, the institute’s chief operating officer, and Clifford M. Marks, a health care researcher st Harvard Business School, it begins:

Steve Brill’s recent piece on the irrationality of health care costs has inspired so many disparate reactions, it feels almost like a health policy Rorschach: Some see a clear case for a single-payer system. Others point to all-payer rate setting. And many health care executives, as reflected in a response from the Healthcare Financial Management Association (HFMA), saw an “unfortunate and misleading” narrative about rampant greed in health care.

The British writer G. K. Chesterton once observed that “[m]an can always be blind to a thing so long as it is big enough.” We wonder if that isn’t happening here, because there is a far more fundamental truth to be had in Brill’s descriptions of nonsensical charges, of patients forced to the brink of bankruptcy by prices that, frankly, seem extortionary. It’s a lesson so big we seem to have trouble even seeing it.

Payment in health care is not tied to what should be its goal of delivering better value, or better outcomes at lower costs. What’s more, everybody knows it. And it is this sobering reality that Brill’s article lays bare: Nobody has any faith in the current reimbursement system – and they shouldn’t. As Brill hammers home in vignette after vignette, health care charges are almost entirely unhinged from patient welfare. You can move to single payer. You can ratchet up taxes on hospital profits. You can enact tort reform. But none of it will work if we fail to blow up the current payment system, and replace it with one that incents value improvement.

When Jeff was CEO of Exempla Healthcare, he told his board – let’s have no rate increase for our chargemaster (the hospital listing of charges so appropriately maligned in Brill’s piece). We all know the chargemaster is crazy, it’s distorted, it’s meaningless. And his CFO responded, great, but if you want to freeze the rates, we’re going to take a $10 million hit. Continue reading →

FILED UNDER: Insurance, Money, costs of care, Institute for Healthcare Improvement

March 11, 2013 | 7:14 PM | Carey Goldberg

When Health Care Costs Help Threaten Teachers We Need

Brookline’s Edward Devotion school (John Phelan/Wikimedia Commons)

For many of us, there comes a moment when the high cost of health care suddenly turns from an abstract public issue into a deeply personal one. Often, it’s an astronomical out-of-pocket medical bill. Or a family calculation that the price of health insurance means no new car, or no summer trip.

For me, that moment came last week at a PTO meeting held at my children’s Brookline public school. At issue: plans to eliminate the “Enrichment and Challenge Support” program.

The program, formerly called “Gifted and Talented,” benefits all the school’s children, and works in every Brookline school. It promotes creativity and learning by inquiry. It collaborates with classroom teachers to help support advanced students, as well as all learners. It works with small groups of kids on topics from reading and writing to math, science and social studies.

Also on our school’s chopping block, separately: The part-time math tutor who works with small groups of children. (The one who prompted a friend’s son to exclaim recently, “Probabilities are fun!”)

In short, our vaunted school district may soon jettison some academic work that perhaps best embodies all the cutting-edge advice on how to train our children to thrive in the 21st-century world.

First, a disclaimer. School district budgets are exceedingly complex and depend on many imponderables, including state and federal budgets. I can by no means draw a direct line between Brookline’s health insurance costs and the decision to cut two of the best and most beloved teachers my children have had.

But here’s what struck me: The endangered program costs the district about $264,000 a year. And in response to a parent’s question, Brookline superintendent Bill Lupini said that for each percentage point that health insurance costs rise, the town must pay about $230,000.

Growth in premiums slowed during the recession, and the town had been hoping the rate news would be good. But it’s not. As of today, Alan Morse, chairman of the Brookline School Committee, says the district’s health insurance costs in the coming budget “are up about 3-1/2 percent, as opposed to the 2 percent which we were hoping for — which reduces the district’s resources available to fund next year’s budget.” Continue reading →

FILED UNDER: Money, costs of care, health insurance premiums

March 6, 2013 | 2:59 PM | Carey Goldberg

Report: Inpatient Detox Costs Patients Ever More Out Of Pocket

Source: Health Care Cost Institute

Here’s some valuable national context for a hot local struggle over inpatient detox beds.

The local news, from the Boston Globe yesterday:

Brigham and Women’s Faulkner Hospital is modifying its plan for closing an inpatient drug and alcohol detoxification unit, after the proposal drew heavy criticism from patients, hospital staff, and mental health advocates who said the state has too few such specialized facilities and the change could harm patients.

“Sure,” I thought when I saw that. “Those attempted cuts fit with all you hear about mental health care as the neglected stepchild of other medical care, and substance abuse as the even more neglected stepchild of mental health care.”

But that’s just my lazy, impressionistic thinking. The quants with hearts over at the Health Care Cost Institute have just used their monumentally huge data sets of tens of millions of insurance claims to pin down what’s been happening lately with inpatient substance abuse payments. And I’d say they, too, found a certain stepchild factor, at least in terms of what patients must pay out of pocket.

Their new report says, according to the press release:

In 2011, out-of-pocket payments for mental health admissions more closely aligned with payments for medical/surgical admissions. However, the amount spent out-of-pocket on substance use admissions remained higher than payments for medical/surgical admissions. Out-of-pocket payments for substance use hospital admissions grew at twice the rate of out-of-pocket payments for mental health or medical/surgical admissions between 2010 and 2011.

The report also found that rates of inpatient detox had taken a major jump after the federal “parity” law, requiring health insurers to cover mental health similarly to physical health, kicked in: Continue reading →

FILED UNDER: Insurance, Medicine/Science, costs of care, parity, substance abuse

March 6, 2013 | 9:23 AM | Martha Bebinger

Mass. Health Care Shoppers Still Choosing ‘Nieman Marcus Hospitals’

Nieman Marcus in San Francisco (sjsharktank/Flickr)

If you buy all your clothes at Nieman Marcus, rather than at Banana Republic, TJ Maxx or Target, you’re spending a lot of money. Are the shirts, jeans or navy blue blazers that much better for four times the cost?

We almost never ask ourselves these questions in health care. We go to the most expensive hospitals in Boston for everything from an X-ray to a complex cancer treatment.

That habit means “the biggest hospitals have the highest price and get all of the payments,” said Aron Boros, director of the Center for Health Information and Analysis (CHIA). The result: We spend more money than we need to on routine care with no apparent benefit. The white shirt (say, a gall bladder removal) is of the same or better quality at Land’s End (your community hospital) as at Bloomingdale’s (a big Boston teaching hospital).

Boros just released the latest figures on the gap between hospitals that get paid very well in Massachusetts and those that are (barely) scraping by.

“This is more evidence that the market isn’t changing as rapidly as one would hope,” he said.

More evidence because this is the second report to show that four out of five health care dollars in Massachusetts go to half the hospitals, the most expensive ones. Continue reading →

FILED UNDER: Insurance, Money, boston childrens hospital, cambridge hospital, CHIA, costs of care, high-cost hospitals, partners

February 20, 2013 | 7:57 AM | Rachel Zimmerman

Why Not Educate Med Students About The Cost Of Care?

Dr. Neel Shah, an advocate for more transparency, value and rationality in the medical system, makes a persuasive case here that medical students are in dire need of instruction on how to think about the cost of medical care.

Dr. Neel Shah

Writing for the blog “Wing of Zock” (if you’re not a doctor and don’t get the reference, click here) Shah points out that these days, physicians are compelled to consider costs through a variety of incentives, “top-down from policymakers who want more accountability in how we are using resources; bottom-up from patients who want more transparency in how we are spending their money.”

But, writes Shah, a chief resident in obstetrics and gynecology at Massachusetts General Hospital and Brigham & Women’s Hospital and the founder and executive director of the nonprofit Costs of Care, incentives are not enough. “We also need to give physicians the skills, training, and support they need to consider costs responsibly.” He continues:

Most physicians learn very little about health care costs during their training; in many cases, they are specifically taught not to consider costs while caring for patients. The traditional concern is that thinking about costs automatically means sacrificing the ingrained physician ethos to do everything possible for our patients. At the same time, many existing teaching methods may exacerbate the problem by embedding a “hidden curriculum,” leading to costlier diagnostic workups and rewards overutilization. Continue reading →

FILED UNDER: Medicine/Science, Money, costs of care, medical school

February 12, 2013 | 1:33 PM | Carey Goldberg

Study: Hard To Shop For Hip Surgery, Even With $100K At Stake

(pasm/ Wikimedia Commons)

As WBUR’s Martha Bebinger has reported repeatedly, it is hard, hard, hard to compare the price tags on medical procedures — even though the out-of-pocket costs to you could vary dramatically depending on where you get your care.

Now a new study in the journal JAMA Internal Medicine pins down this shopping problem for one particular procedure: elective hip surgery called total hip arthroplasty, or THA.

The researchers called hospitals around the country — and called and called and called, up to five times each — in search of the institution’s lowest price for a 62-year-old grandmother who lacked health insurance but could pay out of pocket. From the paper’s abstract:

Results Nine top-ranked hospitals (45%) and 10 non–top-ranked hospitals (10%) were able to provide a complete bundled price (P < .001). We were able to obtain a complete price estimate from an additional 3 top-ranked hospitals (15%) and 54 non–top-ranked hospitals (53%) (P = .002) by contacting the hospital and physician separately. The range of complete prices was wide for both top-ranked ($12 500-$105 000) and non–top-ranked hospitals ($11 100-$125 798).

Conclusions and Relevance We found it difficult to obtain price information for THA and observed wide variation in the prices that were quoted. Many health care providers cannot provide reasonable price estimates. Patients seeking elective THA may find considerable price savings through comparison shopping.

Oh, except, wait a minute, you can’t comparison shop very well when more than half of hospitals can’t give you their prices.

The latest health reform law in Massachusetts, passed last year, is supposed to address this problem and require greater price transparency from hospitals. Will it? Meanwhile, my friend Jeanne Pinder’s ClearHealthCosts.com uses crowdsourcing to help consumers help each other gather cost data. She blogs about the new study:

This is one of our favorite topics. If you haven’t recently, go to our PriceMap interactive page and play around with the search; for a range of procedures, in cities all over the United States, we show you what the government is paying via Medicare, the program for the elderly and disabled. You’ll be shocked at the range.

FILED UNDER: Insurance, Podcasts, costs of care

December 12, 2012 | 12:11 PM | Martha Bebinger

Mass. Health Insurance Premiums Bounce Back To Highest In Country

(Source: The Commonwealth Fund)

Massachusetts is #1 again, but not in any way the state will celebrate. We have the highest health insurance premiums in the nation again, according to this annual report from the Commonwealth Fund. Massachusetts bounced back to the top again in 2011 after dropping to 9th place in 2010.

The report does not analyze why Massachusetts is back in first place, but notes that in general, health care costs are higher here because we have more generous benefits, our cost of living is higher overall, and our health care prices tend to be higher.

An important caveat: That high cost of living, and our higher incomes, need to be factored in. If you look at our premiums as a percentage of median household income, we’re actually on the low side: 18% compared to a national average of 22%. (See chart below.)

Still, this bump from 9th back to 1st is bad news. It’s also politically significant. Last year, hospitals and business leaders used this drop in health insurance costs (relative to the rest of the country) as proof that the market was working to curb health care spending. And, they argued, the drop to 9th place meant the state did not need to impose new controls. Leaders made this argument in the heat of legislative debate about what to include or leave out of the health care costs bill Governor Deval Patrick signed in August.

So what do those leaders say now? Continue reading →