Need to get your appendix removed in Massachusetts? The median price tag ranges from $6,141 to $11,889 depending upon which hospital you select.
Those cost figures, published in a May 2011 report by the Massachusetts Division of Health Care Finance & Policy, are part of a blitzkrieg of data that state officials have released in recent years as they strive to better understand what’s driving the state’s high and ever-increasing health costs.
The level of pricing detail is “quite unusual” compared with other states, says Sharon Long, a senior fellow at the Urban Institute, who recently authored a Health Affairs analysis of the Massachusetts reform experience. “There is a wealth of information on costs and the drivers of cost, but no consensus on where to go from there.” At a minimum, though, the publication of hospital-specific prices has been influential, putting pressure on high-cost hospitals, says Alwyn Cassil, a spokeswoman with the nonpartisan Center for Studying Health System Change in Washington, D.C.
“When the price differentials are being blared on the front page of the Boston Globe, it’s difficult to maintain that you should actually be getting those kinds of price increases,” she says.
As one example, Massachusetts General Hospital commands one of the highest prices for a vaginal delivery from commercial insurers, a median of $6,146, ranking it nearly at the top of a list of 46 hospitals, according to the report. The statewide median is substantially lower at $4,525. But steep prices haven’t driven away patients, at least where baby deliveries are concerned. Nearly half of all vaginal deliveries are performed at hospitals ranked in the costliest of four pricing tiers, according to the same report.
The bottom line is that some high-profile teaching hospitals are charging higher prices not just for complex, high-tech surgeries, but also for more routine procedures, says Paul Hattis, a physician who is senior associate director of the Masters in Public Health program at Tufts University Medical School. “They make a lot of money off the bread-and-butter stuff that can be done just as well, and safely, locally.”
The challenge is how to persuade patients to look beyond “historical brand name” when choosing health care, Hattis says. He’s assisting in an educational initiative, funded by the Robert Wood Johnson Foundation, to develop a series of consumer webinars focused on health system complexities. The first webinar of the series, led by the Greater Boston Interfaith Organization working with the Tufts Health Care Institute, looked at health costs, including price variations between providers.
Are Massachusetts consumers cost-sensitive enough to influence the marketplace? The idea behind an emerging plan design, called “tiered plans,” is that consumers can decide for each treatment or procedure whether they’re willing to pay more for a particular doctor or hospital.
“The theory under tiered pricing is to get consumers to vote with their feet,” Hattis says. “And then providers will bring prices down, not wanting to lose business.” Still, he adds, “That remains an open question.”
Charlotte Huff is a freelance writer based in Fort Worth, Texas. To comment, email firstname.lastname@example.org.
Workforce Management, March 2012, p. 36 — Subscribe Now!