Private insurers paid about $7,274 for a laparoscopic cholecystectomy performed at Massachusetts' Quincy Medical Center in 2009. Roughly 10 miles away in Boston, they paid $12,670 for the same procedure performed at Massachusetts General Hospital. What's wrong with this picture? That's what state leaders want to know in the wake of a new report on healthcare cost trends that shows a wide disparity in how different Bay State hospitals are being paid for the same services.
The report from the Massachusetts Division of Health Care Finance and Policy shows a 6- or 7-fold difference in median prices for a majority of inpatient services performed across facilities statewide, a trend the governor and state health officials say has healthcare costs spiraling out of control.
For example, insurers forked over $25,284 for total knee replacements at Boston's Brigham & Women's Hospital while paying just $14,153 for the same procedure at Lowell General, according to the analysis.
While the study calls attention to a wide range in pricing from hospital to hospital, it reports little variation in the quality of the services performed. It also notes that patient volume was concentrated in 5 higher paid Boston-area hospitals, which accounted for a majority of the state's high-priced discharges. For example, 75% of hip replacements performed in the Boston metro area were paid above the statewide median, according to the report.
Massachusetts Gov. Deval Patrick says the report should sound as a warning bell for taking immediate control of the state's rising healthcare costs. He took the opportunity to tout the healthcare cost containment bill he filed early this year, which he says would make "significant strides in helping to achieve needed relief for consumers and businesses that are paying far too much for health care."
Seena Perumal Carrington, acting commissioner of the DHCFP, believes it's important to separate fact from fiction when attempting to implement strategies aimed at reducing healthcare expenditures. "It is my hope that (this report) will inform discussions and spur action toward increasing the delivery system's efficiency."
Daniel Cook
