Tag: healthcare costs

Are Massachusetts healthcare costs ok after all?

December 20th, 2016 by

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The best defense is a good offense. I assume that’s what Partners HealthCare CEO David Torchiana had in mind when he penned First do no harm in the Boston Globe. In a nutshell, he argues that healthcare costs in Massachusetts are more affordable for businesses and individuals than elsewhere in the country, that they are becoming relatively more affordable, and that the state should resist the urge to impose further cost controls.

I’ve made similar arguments about affordability myself. See for example, Massachusetts: Land of affordable health insurance from back in 2011.

And yet…

While Massachusetts has retained its affordability relative to other states, healthcare is taking up a higher and higher percentage of families’ incomes, including in Massachusetts. Medicaid and other healthcare spending dominates the state government’s spending growth, squeezes out discretionary initiatives for priorities such as education, and necessitates the tough budget cuts Governor Charlie Baker is making.

I’m sure I’m not the only one whose eyebrows were raised by Torchiana’s sanguine perspective.

Partners also should not claim too much credit for the reasonableness of healthcare spending in Massachusetts, considering that its own costs are among the highest. Despite receiving substantially higher reimbursement from commercial payers than other providers and enjoying a richer payer mix, Partners recently reported a record loss of $108 million for the year. Meanwhile, its smaller rivals –including those who treat a higher proportion of Medicaid patients and receive lower commercial reimbursement rates– are reporting better financial results.

If Partners had remained just Massachusetts General Hospital and the Brigham & Women’s Hospital I don’t think its executives and lobbyists would have to expend so much effort fending off the state. Massachusetts residents are justifiably proud of the worldwide reputations of these hospitals, which draw tremendous research dollars from the NIH and elsewhere, attract patients from around the world, and are equipped with the medical expertise and equipment to treat the most complex conditions.

No, the issue is that over the years Partners has dramatically expanded its footprint throughout the region, buying up or partnering with community hospitals and physician practices, and expanding its own overheads as it grapples with the balance between central and devolved management. Partners is now in the business of providing routine care throughout the region, and that helps drive up costs and puts the company in the spotlight. As the state grapples with bringing costs in line with benchmarks, Partners cannot expect to be given a free pass.

So there are a couple of alternatives: #1: Partners can bring its own costs closer in line with rivals or #2 it can divest its community assets and focus on being a great academic medical center. From what I can see, Partners is pursuing a light version of #1 while simultaneously slowing its plans to further expand in the community and mounting a charm and lobbying offensive with the state and the public.

By healthcare business consultant David E. Williams, president of Health Business Group.

15 minutes could save you… nothing in medical bills

March 4th, 2014 by

Two medical bills arrived in the mail over the weekend. One requested $525 for a specialist office visit, another $250 for a routine colonoscopy at a hospital. Since I don’t think we owe for either of these and the numbers are pretty big I decided to tackle them.

The specialist bill was odd because it didn’t appear that the insurance company had been billed. We go to this specialist frequently and have had the same Blue Cross Blue Shield of MA plan for a long time so I wondered what happened. After going through the phone tree, being kept on hold and listening to a recording about “higher than normal call volume” I was connected with a customer service rep. She said, “actually looks like insurance just paid. Your balance is $5.” On the one hand I was happy but on the other hand if I had just waited for the next bill it sounds like I would not have had to call at all. I’m still not sure why they sent the bill to me without any indication of billing the insurance company.

For the colonoscopy I decided to call my health plan first to check whether I had full coverage. They had “higher than normal call volume,” too, which I think must be normal. They were surprised to hear about the request for $250 but then looked at the bill and said it had been submitted as an outpatient surgical procedure (for which I would owe $250) rather than as a routine preventive screening.

I then called the hospital and had a long wait on hold, although they didn’t say anything about it not being “normal” call volume. I explained the situation, the rep then went to do a bit of research and came back to tell me it was billed properly –but not as a routine colonoscopy– and could I please pay the $250. I said no, hung up the phone, and spoke to the patient who assured me it was in fact a routine, every 5 year screening.

Not exactly what to do next, I decided to send an email to the hospital (conveniently, there is a billing email on the bill) presenting the information I have. I was happy to receive a reply within one business day letting me know they were checking with the physician to look into it.

So bottom line: I spent about 45 minutes on these bills and don’t have a lot to show for my effort so far. On the other hand I have helped drive up administrative costs by prompting action from my specialist’s billing office, health plan customer service, hospital billing office and now a doctor.

By healthcare business consultant David E. Williams, President of the Health Business Group