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Low Price Hospitals

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Low Price Hospitals Health Policy Commission Public Hearing Modification of the 2018 Health Care Cost Growth Benchmark Wednesday, March 8, 2017, 1:00pm 50 Milk Street, 8th Floor Boston, MA 02109 Testimony Steward Health Care System From 2013-2015, The Highest Priced Hospitals Experienced Significant Growth in Inpatient Discharges While Low Priced Hospitals Lost Volume, Yet Remained Efficient Highest Price Hospitals Low Price Hospitals 317,000 2013-2015 488,000 2013-2015 316,305 486,042 316,000 486,000 + 4,143 - 8,973 484,000 315,000 482,000 314,000 480,000 313,000 478,000 312,162 477,069 312,000 476,000 311,000 474,000 310,000 472,000 2013 2015 2013 2015 17 Hospitals with Avg. 46 Hospitals with Price of 1.4 Avg. Price of 1.0 Source: CHIA Inpatient Case Mix Data 2013-2015, CHIA Relative Price 2014 Note: Highest Priced hospitals are defined as those with the 75% highest Relative Prices in 2014 On Average, Every Discharge That Takes Place at a High Price Provider Costs the System Over $9,000 More Than If It Took Place At A Low Price, High Quality Provider $25,000 Weighted Average WAPR $22,491 $20,000 $15,000 $13,265 $10,000 $5,000 $0 High Price Low Price Boston Hospitals Account for Nearly Half of All Hospital Commercial Reimbursements Boston Teaching Beth Israel Deaconess Medical Center Share of Commercial Payments by Payer Brigham and Women's Hospital Massachusetts General Hospital Tufts Medical Center 2014 Boston Medical Center Boston Children's Hospital Dana-Farber Cancer Institute Massachusetts Eye and Ear Infirmary Brigham and Women's Faulkner Hospital Blue Cross Blue Shield (BCBS) Harvard Pilgrim Tufts Health Plan Boston Non-Teaching New England Baptist Hospital Community DSH Athol Memorial Hospital Baystate Franklin Medical Center Cape Cod Hospital Clinton Hospital Fairview Hospital Falmouth Hospital Harrington Memorial Hospital Community- Community Community- HealthAlliance Hospital Other Heywood Hospital - Other Other Holyoke Medical Center 15% 18% 18% Jordan Hospital Boston Lawrence General Hospital Boston Boston Lowell General Hospital Community Community Teaching Marlborough Hospital Teaching Teaching Community Martha's Vineyard Hospital Teaching Teaching 43% Mercy Medical Center 48% Teaching Noble Hospital 16% 50% 13% North Adams Regional Hospital 16% North Shore Medical Center Signature Healthcare Brockton Hospital Southcoast Hospitals Group Steward Carney Hospital, Inc. Community Community Steward Good Samaritan Medical Center Community Steward Holy Family Hospital, Inc. DSH DSH Steward Merrimack Valley Hospital DSH Steward Morton Hospital 18% 19% Boston 22% Steward Nashoba Valley Medical Center Boston Non- Non- Boston Non- Steward Norwood Hospital, Inc. Steward Quincy Medical Center Teaching Teaching Teaching Steward Saint Anne's Hospital, Inc. 1% 2% Steward St. Elizabeth's Medical Center 1% Sturdy Memorial Hospital Wing Memorial Hospital Community- Other Anna Jaques Hospital Baystate Mary Lane Hospital % of Beth Israel Deaconess Hospital - Needham 40% 41% 36% Beth Israel Deconess Hospital - Milton Patients Cooley Dickinson Hospital Emerson Hospital Hallmark Health MetroWest Medical Center Milford Regional Medical Center Despite Receiving ~50% of Payments, Boston Teaching hospitals account for only 39% Newton-Wellesley Hospital Northeast Hospital of Commercial patients. South Shore Hospital Winchester Hospital Nantucket Cottage Hospital Community Teaching Lahey Clinic Mount Auburn Hospital Note: Aggregate relative price shown, inclusive of all commercial payers. Baystate Medical Center Berkshire Medical Center Source: Provider Price Variation in the Massachusetts Health Care Market (2014 data), CHIA, February 2016 Cambridge Health Alliance Saint Vincent Hospital UMass Memorial Medical Center Boston Hospitals Have an All-Payer WAPR that is Significantly Higher Than Community Based Providers (Community Providers Offer Good Value) Weighted Average Payer Rate (WAPR) Community Hospitals vs. Academic Medical Centers $35,000 182% $30,000 Higher $28,999 $25,000 83% Higher $19,620 $20,000 $15,000 $11,603 $10,727 $10,269 $10,000 $8,645 $5,000 $- Lawrence General Holy Family Beth Isreal Norwood Milford Hospital Mass General Hospital Deaconess Hospital Source: 403C Cost Reports, Steward Analysis 5 Hospitals With High Prices Have Higher Growth in Inpatient Discharges, Which Drives Total Health Care Expenditure in Mass Percent Growth in Inpatient Discharges by Relative Price 2013-2015 30% 20% Nantucket Cottage Beth Israel 10% MGH Martha’s Vineyard Boston Children’s 0% 0.50 0.70 0.90 1.10 1.30 1.50 1.70 1.90 2.10 -10% -20% -30% Source: CHIA Inpatient Case Mix Data 2013-2015, CHIA Relative Price 2014 Without Indexing, Cost Containment Efforts will Falter Commercial Prices for Massachusetts Acute Care Systems 1.60 2010 to 2016 Setting the 1.50 Partners Under Benchmark at an Indexing Absolute level, 1.40 advantages High 1.30 Price Providers whose prices, 1.20 volume and revenue are rising at a higher 1.10 Under rate and who have a Mount Auburn Indexing disproportionate 1.00 impact on cost Steward Under Indexing growth 0.90 Under Lawrence General Indexing 0.80 2010 2011 2012 2013 2014 2015 2016 Note: Aggregate relative price shown, inclusive of all commercial payers. Source: Provider Price Variation in the Massachusetts Health Care Market (2013 data), CHIA, February 2015; CHIA Price Variation data 2010 to 2012. .
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