Hospital costs throughout the U.S. are constantly on the rise, but nowhere more so than in Massachusetts, where they rose to more than 55 percent above the national average in 2007. The culprit? A combination of expensive clinical service usage, fewer manufacturing companies and "heavy reliance on teaching hospitals," according to a recent report co-authored by Alan Sager, a professor of healthcare finance at Boston University's School of Public Health.
The hospital cost per patient in Massachusetts in 2007--the most recent year from which data was used for the report--totaled $3,015. The national average that same year was $1,941 per patient, according to the Associated Press.
Catherine Bromberg, a spokeswoman for the Massachusetts Hospital Association, called the report's analysis of data "inaccurate," and added that the state's rates are actually much lower according to other studies.
However, a Boston Globe article details how one regional insurer, Harvard Pilgrim Health Care, paid some hospitals up to three times more money for the same care as other hospitals. Rick Weisblatt, senior vice president for health services at Harvard Pilgrim, said some of the bigger teaching hospitals in Boston use their stature and geographic dominance as "leverage."
"The employers in that community generally want that hospital in the network," Weisblatt said. "And the hospitals are not shy about threatening termination."
Hospitals in the Partners HealthCare stable are paid anywhere from 15 to 60 percent more than other hospitals for the same work, which in turn, has driven up costs in the Eastern portion of the state, the article points out.
Partners called its fees appropriate, citing that is hospitals are ahead of the curve for most other facilities in terms of disease treatment and research. But Dr. JudyAnn Bigby, secretary of the Executive Office of Health and Human Services for the state, thinks that a lot of the high hospital costs have to do with a desired for more money.
"So much of what drives costs now is the revenue that hospitals want to generate," Bigby said.