Grand Valley data says cheap Medicare comes with price
While health care experts in the Grand Valley know what they doing when it comes to providing indigent and elderly care, it coming at a high price for everyone else.
A new national study released last month shows that while places such as Grand Junction and a few select cities in the nation have figured out how to offer better, cheaper care for those on Medicare, commercial ratepayers are footing the bill.
Still, the study, which showed that areas that have the lowest costs for Medicare also have the highest commercial rates, is only the beginning of a larger problem, local health care experts say.
But how to fix the problem of skyrocketing hospital pricing on medical procedures for commercial payers, and the insurance premiums to cover those costs, is far more complicated.
Last month, a group of researchers from Yale University, the University of Pennsylvania, Carnegie Mellon and the London based Centre for Economic Performance released a first of its kind study under a joint program called the Health Care Pricing Project.
That project produced what is expected to be the first of several studies on health care costs, which examined hospital pricing under Medicare and compared it with never before released data on what hospitals charge private insurance companies for the same procedures.
It found, among other things, that costs were dramatically higher for employer sponsored insurance provided by three of the nation five largest insurers, particularly in areas that have only one or two hospitals.
The study cited Grand Junction experience specifically because the valley has been an exemplar for the nation when it comes to providing health care for the poor and the elderly. President Barack Obama brought national attention to the valley efforts in a 2008 speech at Central High School as a prelude to what later would become the federal Affordable Care Act.
The study confirmed that Grand Junction does indeed have the third lowest spending per Medicare beneficiary among the 306 hospital referral regions it examined nationwide, but also had the ninth highest inpatient prices and 43rd highest spending per privately insured beneficiary in the nation.
The study found similar results in other areas of the nation that also have low Medicare spending programs, such as Rochester, Minnesota, and La Crosse, Wisconsin.
The study researchers said a large part of the issue was that those areas also have hospitals that have near monopolies, such as St. Mary Medical Center in Grand Junction, concluding that a lack of competition was contributing to the higher prices for private insurers.
average insurance policy for a family of four is $16,000. and what this is showing is why those plans are so expensive, said Zack Cooper, assistant professor of public health policy at Yale University Institute for Social and Policy Studies and of Economics, one of the researchers in the study. for the folks with full insurance coverage, out of pocket costs are basically the second leading cause of payday loans and one of the leading causes of personal bankruptcy. marketplace
While the study blamed a lack of competition for the pricing disparity more than anything else, local health care experts said the problem is much bigger than that.
Because of the distance from larger hospital markets such as Denver and Salt Lake City which have far lower Medicare and private health care spending than the Grand Valley vastly fewer number of patients to serve, and the higher costs associated with attracting quality medical professionals to rural areas, it natural for prices on medical procedures to be higher in such areas as Grand Junction, local experts say.
Additionally, trying to equate free market principles to health care doesn always work, said Steve ErkenBrack, president and chief executive officer of Grand Junction based Rocky Mountain Health Plans.
example, in Grand Junction, we going to have 450 to 500 babies born in a given year. Period. That it, ErkenBrack said. doesn matter how many hospitals or places are delivering those babies, people are only going to have so many. If you have 200 of those babies being born in a different facility. then the cost is being spread over 300 babies, which drives the cost up. If you have efficiencies of scale, then you have to have something other than competition that going to bring the price down. then, only works when all things are equal. It goes out the window, particularly in health care, when there are medical complications. When that happens, St. Mary has long argued that it is more equipped to deal with such complications, and that always comes at a higher cost.
Still, it just that competition that Chris Thomas, president and chief executive officer at the valley second largest medical center, Community Hospital, hopes to address with the soon to open brand new hospital that it building near 24 and G roads.
Though smaller than St. Mary the new facility will offer more services than it ever has, including an obstetrics ward.
Thomas said building a new facility not only will help his hospital attract more patients, and more profits as a result, but also could prompt his competitors to react by lowering their prices.
we going to have to compete on quality and service and price, but that what we been saying for seven years now, he said. think competition is good. If someone says, I not going to go to you because of higher costs, I going to say, I better do something about it. I think that good for the community. If we end up with two solid hospitals, consumers are going to have a choice. The other hospitals in town, they going to be in the same boat. Community Hospital is a stand alone nonprofit facility, St. Mary is part of a national chain of nonprofit hospitals called Sisters of Charity of Leavenworth, or SCL for short, which operates 15 hospitals and medical clinics in Colorado, Kansas and Montana. St. Mary is one of the more profitable in the network.
According to its 990 tax return forms filed with the Internal Revenue Service, St. Mary pulled in about $421.4 million in total revenues in 2014, leaving it about $33.8 million after expenses. That after it made allocations of about $44.1 million to SCL that same year, up from about $33.3 million in 2013.
Randy Pifer, a health insurance broker and benefits adviser at Active Insurance Solutions in Grand Junction, said many of his clients, individuals and businesses alike, are quickly getting fed up with rising premiums and deductibles as a result of the higher prices for medical procedures.
As a result, an increasing number of businesses are opting not to offer health coverage for their employees, and those workers are finding it hard to find affordable coverage on the open market, including through the state health care exchange, he said.
Pifer said the federal health care law isn helping them because they make too much money to qualify for tax credits, but not enough to pay for health care and all their other bills.
long and the short of it is, new rates that were effective Jan. 1, 2014, to new rates that are now effective Jan. 1, 2016, individual policyholders across the valley have basically seen an increase in excess of 100 percent, Pifer said. had numerous of my own personal clients this year just forgoing the insurance. They don qualify for the tax credits because they are $1.02 above the limit, so therefore they get absolutely zero. They just going to forgo the insurance outright because it either that or continue to make their house payments.
Brian Davidson, interim chief executive officer at St. Mary Hospital, the region largest, said pricing decisions are based on costs of providing services to an area that otherwise wouldn have it.
you in a http://www.cheapjerseys11.com/ big market and you have multiple players, competition does well to lower your prices, Davidson said. Mary wants to provide as many services as possible to as many people. Sometimes that costs money. We want to have a cardiac surgery program. We want to have high risk obstetrics. Many of these programs either break cheap jerseys even or lose money. But we want to provide those services because that what the community needs.
we don have the option of economies of scale of adding more, and getting more business, he added. going to have a set population. It not going to grow. Michael Pramenko, a family physician at Primary Care Partners, 1120 Wellington Ave., in Grand Junction, said too much expansion by hospitals in the valley has contributed to hospitals setting higher prices for their procedures to pay for additional staff, space and new services.
He said the study results come as no surprise to him and other medical professionals in the valley, saying it something he been talking about for years. That partly why he pushed for a clinically integrated network of folks to help provide health care at a lower cost.