Fascinating Health Care Cabinet meeting on hospital markets, concentration, costs and the magic of VT

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This week’s Health Care Cabinet meeting was fascinating. We first heard about the impact of hospital consolidations in CT. We heard a moving story about a Spanish-speaking woman suffering a mild stroke who had to be airlifted from Windham to Hartford because since Hartford Hospital’s acquisition of Windham Hospital, there is no longer a neurologist available. This is despite hospital assurances during OHCA’s merger approval process that there would be no change in service availability. There was no interpreter for the patient, no one to talk to, on the 30-minute helicopter ride, as she was experiencing the effects of the stroke. We also heard from the authors of a critical report outlining the likely cost impact of Yale-New Haven’s proposed acquisition of L&M Hospital, and from a nurse from L&M concerned that what happened in Windham will happen in New London if the merger goes through.

We then heard a fascinating presentation by Zack Cooperfrom Yale’s School of Public Health and the Health Care Pricing Project on the first of several articles he is working on about health care prices. There were many themes including that hospital prices average 15.3% higher in monopoly markets where there is no competing hospital within 15 miles, that Medicare price and utilization dynamics are not correlated with private coverage, and that private plan prices are not linked to better quality of care – a big problem as we try to move CT’s health system toward paying for value over volume. My favorite finding is that there is no evidence of a cost shift from Medicare to private coverage prices. While it is true that Medicare pays providers less than private prices (Medicare rates cover the costs of care plus a small profit), there is no support for the widely-held assumption/complaint/excuse that this drives up private hospital rates.
Not surprisingly, all of CT is among the highest Medicare per person spending areas in the US. And while the Bridgeport and New Haven areas are also among the highest spending for private coverage, Hartford is a little below the US average. He also showed substantial price variation within markets. Patients searching for a lower limb MRI in CT can save $1,000 by shopping around. This is increasingly important with the growth of high-deductible health plans.
We also heard from the consultants working on the Cabinet’s cost-containment study. This month they focused on the magical state of VT which is miles ahead of CT in cost control. There was a lot of information on VT’s cost control success with Patient-Centered Medical Homes and the Blueprint for Health that supports those PCMHs, and their plans for a single, multi-payer ACO. The consultants’ attribute VT’s success to committed leadership, regulatory power and a culture that expects trust and collaboration. VT stakeholders put aside their narrow interests and work together in good faith toward a system that works for everyone. Cabinet members generally agreed that CT especially needs to work on the trust part.

It was a fascinating morning. I can’t wait for next month’s meeting.