Stark hospital fee disparities found

Patrick wants a say on health care costs

May 27, 2011|By Liz Kowalczyk, Globe Staff

When a heart attack patient was admitted to South Shore Hospital in Weymouth in 2009, insurers paid $9,684 on average for the hospital stay. But for patients who got similar care at UMass Memorial Medical Center in Worcester, that price tag was nearly twice as high, $19,059.

The price of a new knee varied nearly as much. At Lowell General Hospital, insurers shelled out an average of $14,153. The typical bill for a knee replacement at Boston’s Brigham and Women’s Hospital: $25,284.

A new report from Governor Deval Patrick’s administration confirms previous findings that hospitals are paid widely varying amounts for providing similar care. But it also shows that some are paid a lot more even for common bread-and-butter procedures, such as for appendectomies and minimally invasive gallbladder removals, that many hospitals do well.

The administration also found that those more expensive hospitals treat a high percentage of patients, creating a double hit on insurers and on employers and employees who pay the premiums.

“The issue is price, but it’s also where people go,’’ said Nancy Kane, a professor at the Harvard School of Public Health and a member of a group that advises Congress on Medicare issues.

Patrick said in a statement yesterday that the report — along with another documenting that health insurance premiums climbed 5 percent to 10 percent annually from 2007 to 2009 — “must serve as an alarm bell sounding the need for urgent action to control rising health care costs.’’

The governor recently proposed legislation that would allow the insurance commissioner to scrutinize contracts setting the amounts insurers pay hospitals and doctors and reject health insurance premium increases based on excessive fees for providers.

The administration has scheduled four days of hearings starting June 27 on how to control health care costs. Legislators held their own hearing this month and are grappling with whether to support the governor’s bill, a process they have warned could take months.

Executives at UMass Memorial and Partners HealthCare — the parent organization of the Brigham and Massachusetts General Hospital, which had the highest payments for seven procedures, including pneumonia and caesarean deliveries — responded yesterday that there are legitimate reasons why they are paid more for care they provide. In part, they said, large academic medical centers must keep expensive burn units and neurosurgery programs at the ready and provide money-losing care like psychiatry, which they subsidize from money made on other services.

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