Hospital Execs React To AG's Report On Health Care
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Walter Ettinger, president of UMass Memorial Medical Center in Worcester, says everyone in health agrees cost is a problem. But the debate concerns how to fix it.
Walter Ettinger, president of the Worcester-based UMass Memorial Medical Center, said when he speaks to colleagues at the hospital or the partnering medical school, just about everyone agrees that the system is broken.
“Everyone at the table says that we’ve got to change the system, that we don’t like it, costs are going up and it’s unsustainable,” he said.
The big question is what to do about it.
Report Fallout
As national health care reform seems more uncertain now than just a few months ago, state Attorney General Martha Coakley’s office released a report last month showing wide disparities for health care costs among health care providers in the state. Some hospitals charge up to twice as much for similar services provided at another hospital, Coakley’s report found.
“In fairness, Massachusetts provides for excellent health care,” Coakley said. “Within three years we’ve gotten 98 percent of residents insured. We are relatively speaking not in bad shape. The real problem is that costs continue to go up, and that is unsustainable and can lead to market dysfunction.”
Hospitals do not base their prices on the value of their care provided, Coakley said. Instead they set them based on the highest rate they can negotiate with private insurers. Some providers, due to size, have “market leverage” they can use to get higher prices, she argues.
These issues are nothing new for Dennis Irish, vice president of marketing, government affairs and community relations for Vanguard Health Systems New England and Chicago, which operates both Saint Vincent’s Hospital in Worcester and the MetroWest Medical Center in Framingham and Natick.
Irish said Saint Vincent Hospital and MetroWest Medical Center are reimbursed “significantly less” than competitors.
“If we are reimbursed less, that places us at a competitive disadvantage,” he said. “When carried to the extreme it impacts our ability to continue to provide comprehensive services.”
Even though most everyone agrees there is a problem, finding a fix is the difficult part.
One way to reduce the disparities in the costs is to provide incentives to use what Irish calls the “high-value” hospitals like his. Insurers could cover the full cost of service for lower-priced providers and only cover a portion of costs at higher-priced institutions, Irish suggested. Patients would pay the difference if they want to go to the higher-priced facility.
“It would be one thing if the quality of care and the outcomes at other hospitals was better,” Irish said. “But the AG’s report doesn’t find that. People are paying more for the same product and services with the same outcome.”
Katharine London, principal associate at the UMass Medical School’s Center for Health Law and Economics, said there may be simpler ways to give patients and doctors information about where to get care.
The state could better track outcomes, for example. Success rates of surgeries, rehabilitation times, the rate of complications and overall customer satisfaction could all be measured. From a heart attack to a knee surgery, measures could be established to quantifiably measure and compare providers.
When people don’t have measures of quality of care they rely on reputation and prices to make assumptions about where the best place to get care is, she argues.
Some health insurers are already using a “rudimentary” evaluation system, London said, but not all insurers and providers use the same measures so it’s difficult to compare.
Marlborough Hospital President John Polanowicz said a good first step is having increased transparency and standardized reporting to the government.
But the bigger issue is the entire fee-for-service model of paying for health care, Pol-anowicz said.
“Extra care doesn’t often improve outcomes, it just costs more,” he said.
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