Anal­y­sis: Pa­tients here pay much more

The Denver Post - - FRONT PAGE - By Christo­pher N. Osher

Col­orado hospi­tals charge their in­sured pa­tients sig­nif­i­cantly more for in­pa­tient and out­pa­tient care than hospi­tals in five other ju­ris­dic­tions stud­ied, a re­port re­leased Thurs­day found.

The anal­y­sis re­viewed health care costs in Col­orado, Min­nesota, Utah, Ore­gon, Mary­land and St. Louis. It found the price of in­pa­tient care at Col­orado hospi­tals in 2016 was 31 per­cent higher than the av­er­age for the six ju­ris­dic­tions re­viewed. The cost of out­pa­tient care in Col­orado that year was 15 per­cent higher than the av­er­age for all the ju­ris­dic­tions.

The study was con­ducted by the Port­land, Maine-based Net­work for Re­gional Health­care Im­prove­ment.

“This year’s re­port shows that Col­orado still has some sig­nif­i­cant cost-sav­ings op­por­tu­ni­ties re­lated to the price of health care ser­vices in our state,” said Ana English, the pres­i­dent and CEO of the Col­orado-based Cen­ter for Im­prov­ing Value in Health Care, a non­profit that pro­vided Col­orado claims data for the study. “Many ef­forts are un­der­way in Col­orado to curb health care costs, and this

new data shows that we need to ac­cel­er­ate those ef­forts in cer­tain ar­eas in or­der to make health care af­ford­able for Coloradans.”

All of the ju­ris­dic­tions an­a­lyzed for the study had ro­bust re­gional health care col­lab­o­ra­tive en­ti­ties in place with ac­cess to claims data. Those en­ti­ties vol­un­teered to par­tic­i­pate. Since the in­cep­tion of the project in 2013, 12 ad­di­tional re­gions have agreed to con­tribute data for stud­ies that were more limited in geo­graphic scope, ac­cord­ing to par­tic­i­pants. The study re­leased Thurs­day ad­justed for dif­fer­ences in the un­der­ly­ing health sta­tus of the pop­u­la­tions sur­veyed.

The re­lease of the re­port Thurs­day fol­lows re­cent con­cern ex­pressed by key leg­is­la­tors and of­fi­cials at the Col­orado Depart­ment of Health Care Pol­icy and Fi­nanc­ing over what Col­orado hospi­tals are charg­ing and how rapidly they are build­ing. HCPF of­fi­cials have pointed out that from 2009 through 2016, cap­i­tal ex­pen­di­tures for the hos­pi­tal in­dus­try in Col­orado were higher than all states but Alaska. Kim Bimeste­fer, ex­ec­u­tive di­rec­tor of HCPF, which over­sees the state’s Med­ic­aid pro­gram, has chal­lenged hospi­tals to re­duce their pace of con­struc­tion, say­ing it is un­nec­es­sar­ily du­pli­cat­ing ser­vices and driv­ing up prices.

The Col­orado Hos­pi­tal As­so­ci­a­tion has pushed back. Hospi­tals are build­ing in ar­eas where rapid pop­u­la­tion growth will de­mand ser­vices, as­so­ci­a­tion of­fi­cials say. Hos­pi­tal ex­ec­u­tives add that they must build to a level that will take into ac­count emer­gen­cies, such as a flu epi­demic.

Col­orado Hos­pi­tal As­so­ci­a­tion of­fi­cials were quick to ques­tion the re­sults of the pric­ing study, point­ing out that one of the ju­ris­dic­tions in the anal­y­sis, Mary­land, re­stricts hospi­tals to charg­ing a set price for both Medi­care pa­tients and the pri­vately in­sured. Since Col­orado doesn’t have the same sys­tem as Mary­land, “dra­matic price dif­fer­ences” oc­cur, said Julie Lon­borg, spokes­woman for the as­so­ci­a­tion.

“This is an ap­ples-too-ranges anal­y­sis at best and is based on a small num­ber of hand­picked states,” Lon­borg added. “While there may be lessons within the anal­y­sis, the limited data set does not put Col­orado’s health spend­ing in con­text.”

The cost is­sue has gen­er­ated bi­par­ti­san con­cern. Both State Rep. Bob Rankin, a Repub­li­can from Car­bon­dale, and State Sen. Kerry Dono­van, an Ea­gle County Demo­crat, have said the high cost of health care is push­ing the cost of in­sur­ance in the ar­eas they rep­re­sent in west­ern Col­orado to un­sus­tain­able lev­els. They both pre­dict the cost of in­sur­ance in their re­gion will be a top is­sue in the up­com­ing leg­isla­tive ses­sion. Gov.-elect Jared Po­lis also made the high cost of health care a cen­ter­piece of his suc­cess­ful gu­ber­na­to­rial cam­paign.

The pric­ing study re­leased Thurs­day found that Col­orado’s hos­pi­tal costs were in­creas­ing faster com­pared with the other ju­ris­dic­tions.

In 2015, the in­pa­tient hos­pi­tal costs in Col­orado were 16 per­cent higher than the av­er­age costs for the six ju­ris­dic­tions. Out­pa­tient costs in Col­orado in 2015 were 4 per­cent higher in Col­orado than the multi-ju­ris­dic­tion av­er­age.

Hos­pi­tal care wasn’t the only cat­e­gory of health care with higher costs in Col­orado. Phar­macy costs and pro­fes­sional ser­vices costs in Col­orado were 5 per­cent and 7 per­cent higher re­spec­tively in 2016 in Col­orado than the mul­ti­juris­dic­tion av­er­age.

The prices hospi­tals charge is only one fac­tor in how much health care costs a state. How much ser­vices are used is also a fac­tor. Once health care us­age was fac­tored in along with pric­ing, the to­tal cost for all four cat­e­gories of care sur­veyed was 19 per­cent higher per pa­tient in Col­orado than the av­er­age for all the ju­ris­dic­tions, the study found. Col­orado was the only ju­ris­dic­tion with higher than av­er­age prices in all cat­e­gories of care. Of the states sur­veyed, health care costs were low­est in Mary­land, which re­stricts what hospi­tals can charge for ser­vices. The re­searchers found Mary­land’s costs for all cat­e­gories of care were 20 per­cent lower than the av­er­age for all the ju­ris­dic­tions.

The Cen­ter for Im­prov­ing Value in Health Care es­ti­mated that $141 mil­lion in an­nual sav­ings would be re­al­ized in Col­orado if to­tal health costs were re­duced to the mul­ti­state av­er­age.

Robert Smith, ex­ec­u­tive di­rec­tor of the Col­orado Busi­ness Group on Health, which is push­ing to cap hos­pi­tal costs in the state, said he hopes the study will push leg­is­la­tors and Po­lis to ad­dress the high cost of health care.

“With $141 mil­lion, you could pay for a lot of things, in­clud­ing pay­ing for more pri­mary care,” Smith said. “You could do bet­ter in the ru­ral com­mu­ni­ties on men­tal health. We are com­pletely a high-priced state when it comes to hos­pi­tal costs.”

The study re­leased Thurs­day on pric­ing fur­ther found that there is wide vari­a­tion in what in­sured ben­e­fi­cia­ries are charged for care in Col­orado. Of nine re­gions in the state that were an­a­lyzed, health care costs far more in the state’s moun­tain­ous west re­gion. The com­bined cost for in­pa­tient care, out­pa­tient care, pro­fes­sional ser­vices and phar­ma­ceu­ti­cals was 29 per­cent higher in the moun­tain­ous west than the statewide me­dian cost, the study found. That re­gion also has a 7 per­cent higher rate of uti­liza­tion than the statewide me­dian.

The re­sult of those dif­fer­ences is that there is a wide dif­fer­ence in costs charged per ben­e­fi­ciary. In Col­orado Springs, the av­er­age monthly health care cost per ben­e­fi­ciary is $335. In con­trast, the av­er­age health care cost per ben­e­fi­ciary in the west­ern re­gion is $584.

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