Prescription for health: Shop for best price

Posted July 02, 2010, at 9:50 p.m.

CARIBOU, Maine — Last December, Jim Ashby racked up a bill of almost $700 for some routine bloodwork at the nonprofit Cary Medical Center. His insurance covered half; he paid the rest out of his own pocket.

In March, at his doctor’s suggestion, Ashby made the three-hour drive to Bangor for follow-up tests.

At Affiliated Laboratory, a subsidiary of Eastern Maine Medical Center, the same diabetes test that cost $145 at Cary Medical Center cost $49. A cholesterol test that cost $143 at Cary cost $37.75. The charge for the venipuncture itself — the needle-stick to collect the blood — was $38 at Cary, compared to $6 at Affiliated.

Ashby enjoyed his trip to Bangor, which included an overnight stay in a local hotel and a nice dinner out, and he still saved a bundle.

“There is no reason people should have to travel to Bangor to get these lab tests done,” said Ashby’s physician, Dr. David Connor. “But I tell my patients it will be worth their while if they do.”

Connor said most of his patients have no idea what medical procedures cost. But for those patients who have no insurance coverage and those with high-deductible policies, he said, the expense can be overwhelming and a serious barrier to maintaining good health.

Same service, different price

Most people don’t shop around for health care, even when they have to pay for it themselves.

Especially when the need for care is urgent, people are likely to get help first and ask questions later, said Joe Ditre, executive director of the Augusta-based advocacy group Consumers for Affordable Health Care. Staying close to home is often more important than looking for a deal, he said.

“When I’m sick, my first thought is not to go online and see what I’ll pay — and it shouldn’t be, ” Ditre said in a recent interview.

But for those consumers who are able and willing to do a little shopping, the search is getting easier and can be an eye-opener.

National health reform, with a stated goal of promoting transparency and accountability within the health care industry, promises to move the effort along, Ditre said. In the coming months, health care consumers nationwide — along with policymakers, employers and others — will find more price and quality information available about the doctors and hospitals that provide their care.

In Maine, consumers already can search a variety of websites by area, by procedure, and by hospital or physician practice and find remarkable differences.

The Maine Health Data Organization, an independent agency of Maine state government, has been compiling and analyzing health care information since the late 1990s. More recently, the organization has been publishing cost data on its website, www.healthweb.maine.gov.

Using the agency’s site, consumers, policymakers and others can learn, for example, that for an uninsured patient, the same colonoscopy that cost a median price of $1,130 at Portland’s Mercy Hospital between Dec. 2005 and Dec. 2007 cost $4,895 at tiny Charles A. Dean Memorial Hospital in Greenville.

An abdominal CT scan that cost $899 at Mid Coast Hospital in Brunswick cost $2,410 at St. Joseph Hospital in Bangor. And an outpatient hernia repair that cost $4,022 at Maine Medical Center in Portland cost $11,872 at The Aroostook Medical Center in Presque Isle.

Ironically, it is those who pay their own way in the health care system who pay the most. The public Medicare and Medicaid programs pay only a percentage of what hospitals and doctors charge, and private insurance companies negotiate lower rates. Out-of-pocket payers, however, get charged the full amount.

For example, the statewide median price paid by Anthem Blue Cross and Blue Shield of Maine for a common imaging procedure to diagnose back pain ranged between $736 and $1,501. But an uninsured person paid between $1,141 and $2,088.

Pricing — it’s complicated

It should be a straightforward process to find out what a medical procedure will cost, said Mary Mayhew, a spokeswoman for the Maine Hospital Association.

“Patients and consumers should expect to get good information about anticipated charges,” she said. But that doesn’t mean it’s simple.

The basic charge for a procedure is the same for every patient at any given hospital, Mayhew said, regardless of who is going to pay the bill. But, she added, it is impossible to know ahead of time the complications an individual patient may encounter that could drive up the expected charge for a procedure.

Each of Maine’s 39 private, nonprofit acute-care hospitals calculates its costs and its charges differently, taking into account the value of staff time, materials, equipment, facility maintenance, capital investments, utilities and many other variables. On top of covering those costs, hospitals add differing operating margins, Mayhew said.

“Many Maine hospitals either break even or have a negative margin,” she said.

Mayhew said Maine hospitals must make up for having among the lowest Medicare and Medicaid reimbursement rates in the nation by getting paid more from commercial insurers and patients who pay out of their own pockets.

Growing regulatory pressure and consumer demand for hospitals to report their charges will likely drive down prices over time, Mayhew said. She noted that nonprofit hospitals provide charity care, discounts and payment plans for patients unable to afford the full price of services.

Driving change

Broad pricing disparities for medical procedures are a commonplace and longstanding reality in the health care industry, Ditre said. And information on how well a hospital or a physician performs has only recently begun to be made available to the public.

“No one has really questioned this for decades,” he said. “With a refrigerator or an iPod or a car, we know everything about them before we buy them. But we have no idea when it comes to health care. It’s like buying a car based on the color.”

In addition to individual consumers looking to save on their out-of-pocket spending, large employer groups are seeking enhanced value in their employee health plans, Ditre said. Using published data on cost and quality, he said, employers are providing incentives for employees to seek care from providers who practice according to accepted national standards and report good patient outcomes such as reduced rates of infection or fewer emergency room visits.

Recently, he said, Maine state employees found they would have to pay higher co-payments if they used the services of Augusta-based MaineGeneral Health, which had failed to meet the quality standards reported on the website of the Maine Health Management Coalition. The threat of losing its key patient base drove Maine-General Health into a quick turnaround of its performance, Ditre said — benefiting the health system, the state and the employees.

The growing availability of provider cost and quality data is important to individual consumers, Ditre said. “But on a higher level,” he said, “it is driving systems to change what they’re doing.”

On the Web:

Maine Health Data Organization: www.healthweb.maine.gov

Maine Health Management Coalition: www.mhmc.info

Maine Quality Forum: www.mainequalityforum.gov

Medicare Hospital Compare: www.hospitalcompare.hhs.gov

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