May 8, 2013

Maine panel hears about high cost of hospital care

A proposed bill would allow the publishing of hospital financial data so consumers can compare pricing from hospital to hospital.

By Michael Shepherd mshepherd@mainetoday.com
State House Bureau

 AUGUSTA — Jessica Falconer of Belfast told a legislative committee Wednesday that she was “staggered” when she saw the hospital bill for her Caesarean section.

It was nearly $30,000, several thousand dollars of which her family was liable after insurance picked up the bulk of the costs.

“I have to wonder where this money is going and why they pushed me that way,” Falconer said. “It makes me feel like I had a birth based on commission.”

She was testifying on a financial-transparency bill aimed at Maine’s hospitals, motivated by a recent national dialogue on uneven costs of health care nationwide. The bill had a public hearing before the Legislature’s Insurance and Financial Services Committee at the State House on Wednesday.

The bill, LD 1453, sponsored by Sen. Geoffrey Gratwick, D-Bangor, would direct the Maine Health Data Organization, an independent state agency that collects clinical and financial health care information, to publish an annual study of hospital financial data allowing consumers to compare pricing from hospital from hospital to hospital. 

It would also establish the 11-member Commission to Study Transparency, Costs and Accountability of Health Care System Financing, which would be appointed by House and Senate leadership. 

The commission would be charged with reviewing hospital financial data, including revenue and charges, with an eye toward standardizing data reporting to the state. It would also evaluate methods to reduce health care costs and address rates of increase in health spending.

But the Maine Hospital Association, which testified neither for nor against the bill, says it makes a lot of data available to the public — for example, hospitals’ tax returns are public since they’re nonprofits. 

Jeffrey Austin, the association’s lobbyist, said hospitals and insurance companies fund the Maine Health Data Organization, which already provide a lot of information to the public, including some costs of procedures.

“I don’t know what you want or why, so I can’t support it,” Austin said. “We are frustrated that we are providing resources — both to provide the data and the cash — to help build websites that have exactly what you need.”

Gratwick, a co-chair of the committee, a Bangor-based rheumatologist and a freshman lawmaker, said this bill was a key reason why his constituents elected him.

“This bill, I have to say, comes from deep within me. It comes from 40 years of medical practice,” he said. “This comes from my guts.”

He called it “a small step along the path to reforming our broken health system.”

The nonpartisan Kaiser Family Foundation, using 2009 data, found the United States spends substantially more per capita on healthcare than other developed nations, about 48 percent higher than Switzerland, the next highest spender.

Uneven hospital charges have been a hot topic of late in the national health care dialogue. Gratwick said a February article in Time Magazine, which set out to find why America spends so much on health care, was largely the motivation for his bill.

Among other inefficiencies, Time found many American hospitals charge exorbitant amounts for certain mundane items. For example, one hospital charged $77 each for four boxes of gauze pad in a $348,000 bill following a patient’s diagnosis of lung cancer.

“When a patient goes to a hospital, they should know what they are paying for,” Gratwick said in a statement Tuesday. “Mainers can only make informed decisions about their health care if they have accurate information. Hospitals must make their charges transparent.”

On Wednesday, the federal Centers for Medicare and Medicaid Services released data showing what hospitals charge Medicare for the 100 most common treatments and procedures in the nation. There are wide differences for similar procedures nationwide and even locally. 

According to a press release, inpatient charges for a joint replacement range from a low of $5,300 at a hospital in Oklahoma to a high of $223,000 at a hospital in California. One Jackson, Miss. hospital charged an average of $9,000 for heart-failure treatment. Another charged $51,000.

However, Maine hospitals fared well, according to a New York Times visualization of the federal data: Every state hospital, on average, billed Medicare less than the national average in fiscal year 2011 for those common treatments and procedures.

“What they pay us is lower than what they pay in other states,” Austin said. 

Still, Maine known to be a big health spender. For 2009, Kaiser also found that Maine is among the biggest state spenders on health care — fourth highest, behind Massachusetts, Alaska and Connecticut at $8,521 per capita. 

The foundation attributed that to high enrollment in and use of Medicaid, the nation’s health care system for the poor, saying it had “one of the highest shares of Medicaid enrollees as a proportion of its population” and “these enrollees consumed 18 percent more health care compared to the national average for Medicaid spending per enrollee.

Explosive Medicaid growth has been a main reason legislative Republicans say they are wary of Medicaid expansion, proposed by the federal government and cheered by legislative Democrats.

An analysis by the Kaiser Family Foundation has projected that Maine will save $690 million in the next 10 years if it accepts federal dollars under the Affordable Care Act to provide care to approximately 55,000 Mainers, but Republicans are concerned about what will happen once the 10-year period is up.

State House Bureau Writer Michael Shepherd can be reached at 370-7652 or:

mshepherd@mainetoday.com

Twitter: @mikeshepherdme

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