Mass. probe finds discrepancies in health care payments; Experts examine Mayo Clinic as model for reform

Jan 30 2010

The Boston Globe reports on discrepancies in payments for health care providers. "Massachusetts insurance companies pay some hospitals and doctors twice as much money as others for essentially the same patient care, according to a preliminary report by Attorney General Martha Coakley. ... The yearlong investigation, set to be released today, found no evidence that the higher pay was a reward for better quality work or for treating sicker patients. In fact, eight of the 10 best-paid hospitals in one insurer's network were community hospitals, which tend to have less complicated cases than teaching hospitals." The attorney general's investigation also found "payments were most closely tied to market leverage, with the largest hospitals and physician groups, those with brand-name recognition, and those that are geographically isolated able to demand the most money" (Kowalczyk and Allen, 1/29).

The Minneapolis Star Tribune explores whether the Mayo Clinic should be a model for reform. The hospital has helped lead an effort to change Medicare funding formulas "to reward the most efficient hospitals and pay less to the least efficient. ... If a final health bill passes -- and that's a big if -- it's likely to include a payment formula that would reward efficient, high-quality providers like Mayo. ... But Mayo's victory has come at a price. With some $250 billion in annual Medicare hospital spending at stake, the new payment formula has kicked up a huge fight between potential winners and losers. It has even raised the question: Is Mayo as good as it claims?" Some critics have suggested that Mayo is able to maintain low costs because of its affluent and healthy patient base, "and its Medicare billings are low because it can recoup costs by charging high prices to people with private insurance. Both have bruised Mayo's sterling image a bit" (Yee, 1/29).