Friday, March 19, 2010

"I really like that chart . . ."


. . . because it says it all," noted Ellen Zane, CEO of Tufts Medical Center, in a semi-joking, semi-serious manner. Ellen and I were called back as witnesses at the end of today's hearings on health care and insurance cost trends.

Tufts Medical Center is a competitor of BIDMC, but Ellen and I share views on several topics. This is one. Even though the light orange BIDMC "bubble" appears slightly better off than the Tuft's blue "bubble" in the chart above, the larger societal issue needs to be addressed. It is hard to imagine that the Legislature and Governor really intend the citizens to be served by a health care system that rewards certain providers for their market dominance, especially with no evidence that they offer higher quality.

Ellen explained that, consistent with the findings of the Massachusetts Attorney General, "The funneling of dollars disproportionately among hospital and provider groups serves to warp the overall system balance." She mentioned that one result of this is to allow better paid systems to recruit away doctors to their networks, a result documented by the AG in the chart below.


Ellen pointed out that this result is exactly counter to sound public policy, which should rather encourage the lower cost systems to expand. She agrees with Blue Cross Blue Shield and others that a movement away from fee-for-service payments to capitated contracts will prompt greater efficiency, but she set forth a warning (one my readers have seen before):

"Global payments in and of themselves will not stop the warping behavior," she said. "Unless we deal with distortions in the market, that kind of pricing will do nothing to alleviate the system's problems."

7 comments:

e-Patient Dave said...

For those of us who understand the value of multivariate infographics like this, you CAN'T just fling up these pictures without legends.:)

What does bubble size represent?

What's each axis?

In the second graph, what are the numbers in parens, which don't match the X axis?

Paul Levy said...

Well, sure I can do that, and then you can go to the AG's report and find them.

Oh, never mind. I'll tell. :)

Left axis = Annual revenues from commercial payers (also represented as the size of the bubble).

Bottom axis = relative payment levels to these academic medical centers.

Number in the bubble = case mix index, a measure of the acuity of patients served. Higher number indicates higher acuity, more complex patients. Presumably, you should get paid more for the more difficult cases, but Tufts actually has the highest CMI.

I don't see numbers in parens in the second chart, sorry.

e-Patient Dave said...

> second chart

Um, I meant the second chart *in the sequence I examined them.* Didn't you know that?

>blush...<

Thanks

Paul Levy said...

I shoulda figured that out!

Keith said...

I fail to understand why the insurance industry can't pass on some of the cost to it's insureds. It seems it would be appealing to payors of health care premiums to have a plan that include Partners, but charges higher copays and out of pocket costs for the use of these higher cost providers. This would drive buisiness to the better value institutions, but would not keep Partners from being a choice for patients. For those who feel using the Partners system is a must, they still can, but it will cost them more to do so. Insurance companies already use this strategy when they price pharmacuticals into tiers. Why not do the same for hosptial systems? As a purchaser of insurance, I would welcome a choice of a lower premium that still allows my employees this choice (using Partners), but a recognition that some choices cost more than others and they will need to pick up some of that additional cost.

Anonymous said...

On the general subject of government vs. private health care, see this fascinating interview transcript with Japan's foremost health economist on details of their system:

http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/interviews/ikegami.html

courtesy commenter rbar from the Health Care Blog.

nonlocal

tok said...

What the picture doesn't show is that behind Ms Zane's right hand should be the bubbles for Quincy, Lawrence, Holyoke, Cambridge, and other smaller disproportionate share hospitals who get the worst deals of all. These hospitals are struggling to care for many of Massachusett's needier patients. If these already low-cost institutions were paid at even 85% of the state average (and still only 65% of MGH's rate) many of their financial problems would evaporate.