Why is the price of healthcare for the same procedure dramatically different from one hospital to the next? Why aren’t American’s aware of this? To find out more read the article from The Boston Globe about difference in pricing at Massachusetts Hospitals.
As his patient lies waiting in an adjacent exam room, Dr. James D. Alderman watches while an assistant reaches into a white envelope and pulls out a piece of paper that will determine where the man will be treated. Big money is on the line. of Massachusetts and Harvard Pilgrim Health Care. The gap is even more striking for many individual procedures, which can be two or three times more expensive in one hospital than in another.data shows, but now the escalating prices that hospitals and doctors charge is far more important. A recent Massachusetts study concludes that the price of inpatient care at hospitals is rising by 10 percent a year, while overall use of hospital beds is declining. obtained by the Spotlight Team. The health official who provided the information asked not to be identified for fear of professional retaliation. Though Partners’ rates are not the highest – that would be Children’s – Partners has more effect on statewide costs because its revenue is five times larger.’We were willing to take the risk of challenging payers,’ said Partners chief financial officer Peter Markell, adding that Partners should not have to apologize for a successful strategy. ‘If you are never willing to challenge them, of course they are going to jam it down your throat.’That willingness to get tough turned Partners’ main insurance contracts from money losers a decade ago to the company’s largest source of profit, Partners officials say. Extrapolating from Partners’ internal tally of its insurance revenues, the Brigham and Mass. General receive at least $500 million a year more from the three biggest insurers than if they were paid at the lower rates typical of their rivals. Likewise, Partners’ 6,000 physicians are paid 15 percent to 40 percent more than most other Massachusetts doctors, based on Blue Cross rates, while the company’s community hospitals earn at least 10 percent more than their peers., Tufts, and Harvard Pilgrim. officials discount Partners’ role, while Baker at Harvard Pilgrim says there is a meaningful but hard-to-measure ‘Partners effect’ on statewide insurance costs. And Partners officials themselves have said in the past that their goal was to ‘reset the prices’ paid to hospitals even if it drives up insurance premiums.rates obtained by the Globe.’Shouldn’t there be some correlation between what you get paid for doing something and the quality of what you do?’ asked Beth Israel chief executive Paul Levy last month in remarks at the Massachusetts Medical Society.; the two closely track. The Blue Cross data show that about 10 hospitals – four Boston teaching hospitals and six community hospitals – are paid at least 30 percent above the state average, while 12 hospitals make at least 20 percent below average, including Cambridge Hospital, which earns about half as much per procedure as the Brigham and Mass. General.
Alderman, an interventional cardiologist, plans to open the patient’s clogged coronary artery by inserting a flexible tube with a tiny balloon at the tip. Usually he does the procedure, called angioplasty, at MetroWest Medical Center in Framingham. But he sometimes operates in Boston as part of a research program. One time of every four, by the luck of the draw, Alderman and his patient go to a big teaching hospital in the city.
If the white slip of paper directs him to do the procedure in Framingham, the insurance company will pay the hospital about $17,000, not counting the physician’s fee. If Alderman is sent to Brigham and Women’s Hospital in Boston, that hospital will get about $24,500 – 44 percent more – even though the patient’s care will be the same in both places.’It’s the exact same doctor doing the procedure,’ said Andrei Soran, MetroWest’s chief executive. ‘But the cost? It’s unjustifiably higher.’Call it the best-kept secret in Massachusetts medicine: Health insurance companies pay a handful of hospitals far more for the same work even when there is no evidence that the higher-priced care produces healthier patients. In fact, sometimes the opposite is true: Massachusetts General Hospital, for example, earns 15 percent more than Beth Israel Deaconess Medical Center for treating heart-failure patients even though government figures show that Beth Israel has for years reported lower patient death rates.
Private insurance data obtained by the Globe’s Spotlight Team show that the Brigham, Mass. General, Children’s Hospital, and a few others are, on average, paid about 15 percent to 60 percent more than their rivals by insurance companies such as Blue Cross Blue Shield
This payment pattern has become a driving force in the state’s galloping healthcare costs, and it raises hard questions about why certain hospitals and physicians receive premium pay for care that is no better than that of their competitors. Until now, the growing pay gap has not been subject to public scrutiny because contracts between insurers and hospitals typically include confidentiality agreements.
But an ongoing Spotlight Team investigation of healthcare in this state found scores of payment disparities for routine procedures in which there is no obvious difference in quality. Consider: