Cities see strength in numbers in negotiating for better health care costs

Cities see strength in numbers in negotiating for better health care costs

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Fed up with soaring costs, Dallas and 30 other North Texas municipalities are asking hospitals to submit bids indexed to federally controlled Medicare prices to cover the cost of care for city employees.

Molly Carroll, Dallas’ human resources director, said the city and its employees are spending $129 million on health care costs that are inflating at roughly 10 percent a year. Dallas wants “price concessions as well as some stability,” she said.

“This isn’t their business model,” Carroll said of the area’s hospitals. “Their model is, ‘Just give us your money and don’t worry about what it costs.’ We’re hoping they are interested in at least having a conversation with us about options.”

Gary Brock, president of the North Texas operations of Baylor Scott & White, said Baylor welcomed dialog but would not accept the municipalities’ request for bids.

He characterized Medicare-linked prices as one among several “short-term proposals that do not support the goals of population health initiatives proven to lower an employer’s cost for care while improving the quality of care for its employees and dependents.”

Other hospitals in the area have not yet responded to the coalition’s proposal.

The 31 municipal governments joined in the North Texas Coalition represent roughly 40,000 employees. The number doubles to about 80,000 when insured family members are included.

Read More via Dallas Morning News

Medicare launches payment overhaul for hip, knee replacement surgery

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WASHINGTON (AP) — Striving for better quality and more predictable costs, Medicare on Monday launched a major payment change for hip and knee replacements, the most common inpatient surgery for its 55 million beneficiaries.

Starting April 1, hospitals in 67 metropolitan areas — from Akron, Ohio, to Wichita, Kansas — will be held responsible for the results of hip and knee replacements. The aim is better coordination that starts with the surgery itself, and continues through recovery and rehabilitation.

For the Obama administration, it’s part of a turn away from paying for a piecemeal approach to care, regardless of results. The new direction aims to foster accountability among hospitals, doctors, nursing homes and home health agencies. It mirrors shifts occurring in employer-sponsored insurance and has support, in principle, from lawmakers of both parties.

Under the new system, hospitals can receive additional financial rewards by meeting certain targets for quality and overall costs. If they fall short, eventually they will be financially liable. Medicare recipients will still be able to pick doctors and hospitals for their surgeries.

Read more via US News

It’s tough to shop for health care deals in Texas

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Price transparency isn’t getting better in Texas health care. A report last week gave Texas, along with 44 other states, an F on a scorecard measuring how easy it is for consumers to find out what they’ll be spending — before they get the bill — for medical procedures.

The scorecard, now in its third year, was created by the Health Care Incentives Improvement Institute, a nonprofit based in Connecticut that’s been trying to steer the country away from paying for health care by volume toward a value-based system.

Price transparency is an important step on the way.

New Hampshire is the only state that rates an A on the scorecard. The state’s website (nhhealthcost.nh.gov) makes it easy for consumers to shop around among all of New Hampshire’s hospitals and physicians. It provides consumers with information on what it will actually cost, under their insurance plan, to have medical treatment. Uninsured patient charges are also covered.

Compare that with Texas. Many insurers now give consumers pricing quotes. But if you want to do comparison shopping online among the state’s hospitals, you’ll get only a rough estimate — and a wildly inflated pricing chart — from the Texas Hospital Association’s txpricepoint.org.

On the website, a knee replacement at Baylor University Medical Center prices out at $45,753. At Texas Health Presbyterian Hospital Dallas, the same procedure averages $66,193.

These price quotes come from what the hospitals call their chargemasters. Almost no one pays these rates. Insurers negotiate discounts off the chargemasters, and uninsured patients can get discounts of their own.

Read more via Dallas News

The ease of spending ‘other people’s money’ for health care

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Washington economist Gene Steuerle says the fundamental reason health care costs so much is because both patients and providers spend as if they’re using someone else’s money.

“The original sin of health insurance, public or private, has been to allow patients to demand and providers to supply more health care while pushing charges onto others,” Steuerle wrote for the Urban Institute.

I’ll offer a couple of examples.

A few years ago, neurosurgeons at Baylor Regional Medical Center at Plano invited people with Parkinson’s disease to come in for a free seminar on deep brain stimulation. This is a surgery where wires are inserted into one or both halves of the brain to provide electrical stimuli that sometimes control tremors or other involuntary movements characteristic of Parkinson’s.

“Does Medicare pay for it?” an audience member asked.

Yes, the doctors replied.

Nothing more was said about cost.

Deep brain stimulation is priced anywhere from $35,000 to $100,000, according to the Parkinson’s Disease Foundation.

Read more via Dallas News