Tuesday, July 07, 2015

Huh? Double huh?

This story in the Boston Herald just didn't seem right to me. The lede:

Boston and two other 
Massachusetts cities are among five places nationwide with the fastest-rising medical costs [between 2011 and 2013], according to a recent study — which health care watchers attribute in part to skyrocketing drug prices and high rates of medical specialization.

Even if health care costs did riser faster here, how could that be attributable to drug prices and high rates of medical specialization? Drug prices in Massachusetts are the same here as elsewhere, and--unless there's something really weird going on--dosages in this state should not have increased at a greater rate than the rest of the country.  Likewise for specialization:  This has always been a geographical area with lots of specialists. Could this pattern have changed--in the upward direction--in the study period? Doubtful.

But then it got worse:

The study, conducted by consumer health site BetterDoctor, found that Springfield, Worcester and Boston saw some of the most drastic medical cost increases between 2011 and 2013, based on Medicare data.

Medicare data? Medicare rates are set by CMS for the entire country, with some local differences due to average wage rates, support of residency programs, and the like. There was no way Massachusetts would have seen a dramatically greater percentage increase in Medicare rates during this period.

Prices for treating severe mental disorders at Massachusetts General Hospital increased by 78 percent, the study found. Inpatient diagnoses cost an average of about $61,000 in 2013 — up from about $34,000 in 2011.  

Oh my gosh.  How'd MGH slip through almost a 100% rate increase?

Well, of course they didn't.  Very smart of them to not reply: "MGH declined to comment on the study." It would have been impossible to debunk the entire concept of the story in a sound bite.

I finally found the study on which the news report was written. As best I can tell, the organization used chargemaster figures published by the federal government on which to base the stories.  We all know those are essentially irrelevant.  But the BetterDoctor people have their own theory of how hospital prices are set.  Here it is in a nutshell:

Though the data is from Medicare, the numbers we used to calculate the fastest rising costs comes from the hospital’s procedure prices. The price charged to Medicare is the same price that the hospital would bill an individual’s private health insurance company or an uninsured person. The true amount Medicare actually pays for each procedure and associated bills is a negotiated portion of the overall cost. 

There is an impressive amount of fiction in these three sentences.  I won't bother to try to clarify.

But here's what's more striking than all of this.  The reporter actually got local experts to give reasons for the non-existent local relative price rises!

One said, “This information is consistent with state reports over the last several years.”

Another said,  "When you have a lot of hospitals and doctors in the market, prices go up.”  And, "We’ve seen significant increases in what pharmaceutical companies are charging for not only new-to-market specialty drugs, but pharmaceuticals that have been on the market for years,”

Garbage in, garbage recycled, garbage out.


John Booke said...

Why did the hospitals increase their "Charge Master" prices?

Carole said...

You put forth the effort to look into this more closely gave us additional info. And it still doesn't make sense. I would believe the people of Mass. would challenge this, it's seems off and unfair. " the reasons are not adding up" lots of questions ????