After working in a doctors’ office for 40 years, Mary Stitzell of Sebago thought she understood the health care business well enough.

But when an orthopedic surgeon told her last year that he needed an MRI, or an internal image, of her aching knee, she made a costly — and common — mistake.

“His office simply asked if I cared where I had it done. I said, ‘Nope, I didn’t care,’” Stitzell said.

Stitzell had the MRI done at the Maine Medical Center campus in Scarborough for about $1,800, she said. Only later did she find out she could have saved about $1,000 by waiting a week longer for an appointment at a nearby office of Marshwood Imaging Center.

“It’s absolutely wrong,” said Stitzell, who has to pay the entire bill herself because of a $5,000 deductible on her insurance policy.

For Stitzell, it was a painful lesson about the irrational pricing system for medical care in Maine. The same system has made it possible for one patient’s insurance plan to pay less than $600 for a colonoscopy in one part of the state and an uninsured patient to be charged more than $4,800 for the same procedure elsewhere.

Now, however, patients and employers are learning to shop for medical care the same way they would compare prices for refrigerators or building contractors. Advocates hope that consumer ethic ultimately helps restore reason and brings down costs in the medical market.

“Most people have no appreciation for the fact that there’s such considerable variation. A hip replacement might be $15,000 in one hospital and $38,000 in another,” said Frank Johnson, Maine’s state employee health and benefits director. “It’s just a perverse system.”

A website created last year by the Maine Health Data Organization allows anyone to look up a limited number of medical procedures, such as MRIs or colonoscopies, and compare the prices insurance carriers paid to different hospitals or clinics, as well as the prices charged to patients without insurance.

“Some people have used it to shop around,” said Alan Pryzunka, director of the state agency. “My hope was that it was going to start pushing (prices) down. I’m not sure yet” if it has.

The website now has a limited number of medical procedures and price data that’s at least a couple of years old. But more help for consumers is on the way, Pryzunka said.

September, a deadline set by the Legislature, the state’s website should include a broader range of more up-to-date medical prices, together with information about the quality of care at each hospital and doctors’ office in the state.

Price information is especially important to Maine’s uninsured and to the growing number of Mainers with high-deductible health insurance plans. It’s not uncommon for Mainers to pay $2,500 to $15,000 for health care each year before their insurance coverage even kicks in, especially if they are buying their own individual insurance.

“If you’re very ill, that’s hardly the time” to check prices, Stitzell said. “But if it’s something that’s elective and you know you have a huge deductible, then it’s imperative to look.”

Stitzell said she is angry with her insurance company, Anthem Blue Cross and Blue Shield, for not helping her save money on the MRI and not explaining the bill to her when she questioned it. The company negotiates the prices for its subscribers, but even the Anthem price can vary widely from hospital to hospital.

Although Stitzell didn’t know until it was too late, Anthem has its own cost-comparison web page to help members compare prices of medical procedures around the state. The insurer also says its subscribers benefit from its negotiating clout, even if the patients have large deductibles and bear the costs themselves.

Patients with good insurance plans, and no deductibles, have good reason to pay attention to the prices, too.

Poppy Warford of Brunswick said she and her husband have an insurance plan that picks up all the costs of tests such as colonoscopies. But she still plans to use the website to shop around, just like she would shop for shoes or clothes.

“It’s really to my advantage to make sure I’m not utilizing services I don’t need or paying more than I need to, because next year, that’s going to affect my coverage and my premiums,” she said.

As the website grows and improves, Warford thinks patients will even use it to negotiate better deals before they go in for tests or elective surgery.

“Right now it’s in its infancy stage,” she said. “I believe it’s just taking off.”

State officials estimate that reducing unwarranted variations in price could save $300 million to $400 million a year statewide.

More awareness of costs also could slow a rush to schedule medical tests and procedures that are unnecessary, they said. That overuse of medical technology is considered a major driver of rising health care costs.

“(Mainers) have one of the highest health care costs per capita in the country. You really have to start looking at this stuff,” Pryzunka said.

Maine hospital representatives say the pricing system isn’t as arbitrary as it appears, but it is not one they like, either.

Hospitals set prices based on overall operating costs, private negotiations with insurance carriers and how much money they are losing on other patients or procedures.

It’s no surprise, for example, that smaller diagnostic centers can charge less in some cases than large hospitals do for the same services, said Wayne Bennett, chief financial officer of Mercy Hospital in Portland.

“It’s difficult to compete with those facilities because we have to be open 24 hours a day, seven days a week,” he said. “Hospitals make different choices about how to allocate the labor costs among all their procedures.”

Maine hospitals also have to make up for losses related to government insurance programs, said Mary Mayhew, vice president of the Maine Hospital Association.

Medicare, for example, covers more than 40 percent of hospital procedures in Maine but pays only about 79 percent of the costs for those procedures, she said. Maine hospitals lost $142 million caring for Medicare patients in 2007, she said.

“Those losses have to be cost-shifted in the form of higher charges to commercially insured individuals,” Mayhew said.

“This is not a payment structure that we believe is in the best interest of consumers.”

Hospitals also are shifting those costs onto uninsured patients. Mainers without insurance companies to negotiate prices for them are generally charged the highest prices for medical services.

Uninsured patients who can’t afford to pay some or all of their bills shift more costs to patients — with or without insurance — who do pay.

Such price variations and high charges for the uninsured show how the health care system is geared against the individual consumer, said Joe Ditre, director of Consumers for Affordable Health Care.

“Why should the (uninsured) people who have the least bargaining clout be paying the highest prices? Because the providers can charge them the highest prices, and that’s completely unfair,” he said.

Underpayments from government insurance do not account for the variations in prices, he said. “It can only improve things to have people more informed.”

Stitzell, who is still paying for her knee MRI, has learned her lesson. “Now I need a mammogram. I want to find out where it’s going to cost the least,” she said.

If price comparisons do bring down Maine’s health care costs, it will probably be due to decisions made by people like Frank Johnson.

Johnson oversees the health insurance plan for 32,000 state employees, early retirees and their dependents, the largest single employer group in Maine.

The plan already encourages state employees to use preferred hospitals based on state quality-of-care reports. An employee who goes to a hospital with low infection rates, for example, pays less for deductibles and co-pays than he or she would at a different hospital.

The program has clearly encouraged hospitals to improve quality, he said. “When a hospital falls off that preferred list, they do lose volume, no question.”

Soon Johnson will use cost comparisons when ranking preferred hospitals. That will give tens of thousands of Mainers new financial rewards for going to low-cost, high-quality hospitals.

Such powerful consumer pressure, by the state and large private employers, could restore reason to Maine’s health care costs. But, Johnson said, that could take a while.

“It’s a complex system. It’s not something they can change radically in six months.”

 

Staff Writer John Richardson can be contacted at 791-6324 or at:

jrichardson@pressherald.com