Gorilla Hospitals

November 19, 2008 3:46 AM

The invisible hand of the Free Market guides insurance payments to hospitals "Call it the best-kept secret in Massachusetts medicine: Health insurance companies pay a handful of hospitals far more for the same work even when there is no evidence that the higher-priced care produces healthier patients. In fact, sometimes the opposite is true: Massachusetts General Hospital, for example, earns 15 percent more than Beth Israel Deaconess Medical Center for treating heart-failure patients even though government figures show that Beth Israel has for years reported lower patient death rates."
posted by Kirth Gerson (29 comments total)

Partners' favorable insurance contracts have helped the company to reap $1.7 billion in profits since 2004, reflecting a profit rate that is average compared with the nationally known hospitals the company considers its peers.

As not-for-profit medical centers, Brigham and Women's and Mass. General don't earn "profits," but do, as responsible stewards, use their considerable smarts to produce a margin. This article doesn't differentiate between community hospitals and academic medical centers like Brigham and Women's and Mass. General, which have entirely different missions to the community. A not-for-profit academic medical center is expected not only to generate community benefit in the form of charity care and medicaid shortfall, it has to fund teaching programs, residencies and fellowships, not to mention the research we are all counting on to cure cancer and heart disease. The kind of cheap populism that demands that academic medical centers, who care for the highest acuity cases, have the largest expenses, and produce the most economic benefit for their communities, put on sackcloth and ashes and pretend to be shabby free clinics, is going to tear down these complex, fragile insitutions, which are the envy of the world.
posted by Faze at 4:48 AM on November 19, 2008 [2 favorites]

I hope the invisible hand of the free market reaches up to its invisible neck and strangles itself.
posted by Mach5 at 4:56 AM on November 19, 2008 [5 favorites]

Perhaps Mass Gen gets sicker patients. Lower death rates may not be the whole story.
posted by caddis at 5:14 AM on November 19, 2008 [1 favorite]

The invisible hand of the Free Market guides insurance payments to hospitals

The invisible hand was about sending your money outta your nation.


An Inquiry into the Nature and Causes of the Wealth of Nations
Smith, Adam Wealth of Nations, Cannan edition
Book IV, Chapter II
Of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Now here's some hand action:
http://medicaltourismguide.org/
posted by rough ashlar at 5:27 AM on November 19, 2008 [2 favorites]

Mass General might be charging more because they can handle more severe/critical cases, thus the higher death rates. Is it possible Beth Israel air-lifts patients to Mass General when they don't have the expertise in house for certain situations? A situation like that would definitely help Beth Israel's death rate while hurting Mass General, but wouldn't reflect the quality of care.
posted by ShadowCrash at 5:45 AM on November 19, 2008

Perhaps Mass Gen gets sicker patients. Lower death rates may not be the whole story.

That was my first, thought, too, but the article does address that, indicating that the comparisons between hospitals are leveled to some kind of average patient, in order to do them on more equal ground, but Partners is also on record as disputing that the leveling is accurate or fair.
posted by jacquilynne at 5:46 AM on November 19, 2008

Your favourite system sucks.
posted by gman at 5:49 AM on November 19, 2008

The author points out an instance where the same doctor gets paid more to perform the same surgery when he's in Boston instead of a suburb. Most insurance companies pay rates based on zip codes. It's not surprising that a hospital in Boston would cost more than one not in it. It doesn't surprise me that a hospital in Manhattan costs more than one in New Jersey, it's just a reflection of the higher cost of living. You're average office worker gets paid more too.

Of course, he does state that the cost can differ by as much as 300%, and it's not just for high end care where the quality of the specialist really might be better. Even things like an MRI or Xray have significant price differences. The cost of living is higher, but not that much higher.

All the more reason why we should have a single payer system for the majority of care.
posted by ShadowCrash at 5:51 AM on November 19, 2008

All the more reason why we should have a single payer system for the majority of care.

If the government is the single payer, the citizens have a chance to effect change at the voting booth and via official misconduct laws. *

And that is far more power for most people than stock ownership offers.

*Now try and get the laws inforced VS government officials by another government official.
posted by rough ashlar at 6:01 AM on November 19, 2008

If the government is the single payer, the citizens have a chance to effect change at the voting booth and via official misconduct laws.

it's true in Canada that health care is usually a major election issue at both provincial and federal levels.

/Not that that makes the system perfect, of course, it being government, but at least they have to listen to the electorate.
posted by Turtles all the way down at 6:25 AM on November 19, 2008

I feel like this article misrepresents a lot of patient choices. F'rinstance: Within days, as thousands of Tufts customers threatened to change insurance rather than lose the right to treatment at the two famous hospitals,

Now, my doctor is at "The Brigham" (g-d that sounds so pretentious. Can't we call it B&W? Nooooo. This is Boston. We're puritans here). If my (very expensive) insurance provider were to say "Oh hai! We don't cover doctors at 'The Brigham' anymore!" I would then say "KTHNXBAI!" - not because it's "The Brigham" and it's famous and pretentious, but because I feel greater loyalty to MY DOCTOR with whom I have a human relationship than to whatever insurance company's card is in my wallet.

Also: in comparison, while you can say that I received the "same" care in both situations, the difference between my doctor's office at "The Brigham" (please picture my eyes crossing everytime I say this) and my PCP back in Little Rhody is night and day. The waiting room is better. The staff is more courteous. The waiting *time* is exponentially less. My doctor isn't so rushed that she can't spend an extra ten minutes looking into something.

I see a neuro at "The Brigham" and again, the actual *experience* is far and away better than the same care I've received at other hospitals. Maybe my neuro in Providence was cheaper, and maybe from an insurance standpoint the "care" was the same, but the actual patient experience is quantifiably better.

I didn't choose to live in Boston because of the famous hospitals, but since I'm here and I have a medical condition, I'm going for it. And so far, it's been worth it.
posted by grapefruitmoon at 6:50 AM on November 19, 2008

/me rolls Canada up into a big ol' bear hug.
posted by seanmpuckett at 6:50 AM on November 19, 2008

Mass General might be charging more because they can handle more severe/critical cases, thus the higher death rates.

The mortality rankings - adjusted for the relative sickness of patients at different facilities - graded hospitals as either average, above average, or below average for ailments and procedures from pneumonia to coronary bypass surgery.

Now try and get the laws inforced VS government officials by another government official.

Or try and get the cost-reporting laws enforced:

The law calls for the [Health Care Quality and Cost] council to post insurance claim information on the web so that the public can see the disparities. But a year and a half after the law was passed, the council has still not published its findings because of disputes with medical groups about how the numbers should be presented and whether they are accurate in every detail.

"Apparently, this subject is the equivalent of the third rail," said Gregory W. Sullivan, the state's inspector general and a member of the Quality and Cost Council.

That failure to disclose is what makes the hand I referred to in the OP an invisible one. As a practical matter, it is impossible for a patient to shop for either the best hospital or for the cheapest hospital. This is true both generally and for particular health problems.
posted by Kirth Gerson at 6:59 AM on November 19, 2008

Fyi, "gorillas" are gentle, peaceful primates. A "guerilla", stemming from the Spanish word for war, "guerre", is a person who engages in a specific type of warfare. (This is in reference to your post title.)
posted by iamkimiam at 7:03 AM on November 19, 2008 [1 favorite]

It's not surprising that a hospital in Boston would cost more than one not in it. It doesn't surprise me that a hospital in Manhattan costs more than one in New Jersey, it's just a reflection of the higher cost of living. You're average office worker gets paid more too

The cost of living is the same for staff at Beth Israel as it is for staff at MGH. In fact, the cost of living is not all that different in Framingham, where that doctor performs the same exact procedure for much less money. Nor does his cost of living magically increase by 44% when he performs an angioplasty in Boston.

Zip code is not a factor.
posted by Kirth Gerson at 7:09 AM on November 19, 2008

iamkimiam, try reading the article. It's where the gorilla reference came from, as in "800-pound gorilla."
posted by Kirth Gerson at 7:11 AM on November 19, 2008

interesting article!
posted by john c. at 7:21 AM on November 19, 2008

Some discussion on Paul Levy's (President and CEO of BIDMC) blog about this article.
posted by bondcliff at 7:23 AM on November 19, 2008

A few years ago, when an executive for Beth Israel Deaconess Medical Center asked then-Tufts HMO boss Harris Berman why Beth Israel, a Harvard teaching hospital, wasn't paid as well as Partners, Berman said he had a simple response: "You are not Partners."

Beth Israel is also a teaching hospital, with all the same costs as the other research and teaching hospitals, but not getting paid the same amount by insurers.

So yeah, it's about 800-lb gorrillas.
posted by jb at 8:33 AM on November 19, 2008

I like this exchange from the article:

At a Federal Trade Commission workshop on healthcare in April, the moderator asked a panel of healthcare leaders, "Is price a signal of quality in healthcare markets?"

A professor quickly offered a one-word answer: "No."

There was a pause. Then someone else chimed in, "There's a universal no on that."

The moderator concluded, "That was pretty easy," and moved on to the next question.

Later in the article, they make a good point that you may not want to be at a teaching hospital for a difficult procedure - because you are going to have residents and interns involved, rather than all experienced doctors. It's like going to a prestigious university, only to find that you aren't taught by the famous professors but overworked grad students who don't necessarily specialize in what they are teaching and may not know much more than you do. (Yes, medievalists and early modernists have to teach Vichy France - and the most I know about Vichy France is what I learned from Casablanca.)
posted by jb at 8:42 AM on November 19, 2008

I think on Metafilter, "Free Market" has become a sort of catch-all curse, applied to anything that isn't liked. There's no rational explanation for using it in a discussion of one of the U.S.'s most heavily regulated industries.
posted by yath at 9:05 AM on November 19, 2008 [3 favorites]

Kirth GersonPoster: "16iamkimiam, try reading the article. It's where the gorilla reference came from, as in "800-pound gorilla.""

Sure, except that "Gorilla Hospitals" reads more like a war metaphor when it references a paper about bureaucracy in the healthcare system. And the gorilla reference isn't until page 3.
posted by iamkimiam at 10:08 AM on November 19, 2008

Sure, except that "Gorilla Hospitals" reads more like a war metaphor when it references a paper about bureaucracy in the healthcare system. And the gorilla reference isn't until page 3.

"I didn't make a mistake, I didn't make a mistake, I didn't make a mistake..."
posted by Mental Wimp at 10:38 AM on November 19, 2008

Sure, except that "Gorilla Hospitals" reads more like a war metaphor

Sure, if you can't spell.
posted by rokusan at 11:01 AM on November 19, 2008 [1 favorite]

Sorry to be so snippy. Having an epically bad day. Forgives?
posted by iamkimiam at 12:50 PM on November 19, 2008

No problem. May your tonight be better.
posted by Kirth Gerson at 1:42 PM on November 19, 2008

Massachusetts General Hospital, for example, earns 15 percent more than Beth Israel Deaconess Medical Center for treating heart-failure patients even though government figures show that Beth Israel has for years reported lower patient death rates."

There's a cynical part of me that says, "Because dead patients don't come back for more treatment that must be paid for".
posted by joaquim at 3:04 PM on November 19, 2008

I though that this was some interesting commentary on the subject from the perspective of a doctor.
posted by ericales at 4:29 PM on November 19, 2008

Interesting, maybe, but very early in his piece, he writes this:
Now the first impenetrably stupid thing the authors do is begin with the assumption that compensation for services in medicine is linked to quality.

Of course, in the Globe article, they do no such thing. Maybe he means that the authors of the article imply that compensation should be linked to quality of care. I think it should be, too, all things being equal. The Globe writers explicitly point out that quality care does not lead to higher compensation.

Then he writes:
This is, mind you, from the same article which strongly stated that Partners was making too much money, and that they were overcharging patients for sub-par services.

Again, the article does not state any such things as those. For somebody who blasts the authors of the article for "missing the point," he sure is failing to notice theirs. The point is that Partners is getting compensated far more than its peers, for reasons that have nothing to do with the health of its patients, and the effect on all the other hospitals is bad.

For a more informed take on the situation, see bondcliff's link to the blog of Beth Israel's CEO. Unlike the owner of 'Movin' Meat' blog (pretty crass name, doc), he actually knows what the situation is in MA. Also note that he's in favor of publicizing hospital standardized mortality ratios (HSMRs), and has done so with Beth Israel's. Partners resists releasing its HSMR.
posted by Kirth Gerson at 5:44 PM on November 19, 2008