June 22, 2009 | last updated March 24, 2012 2:13 pm

Worcester Medicare Costs Highest In State | What's driving up health care in Central Mass? The answer isn't clear, but it's got to change

Robert Klugman, chief quality officer of UMass Memorial Health Care.

Health care is expensive, and getting more expensive all the time. That may be true all over the country, but, according to Medicare data compiled by the Dartmouth Atlas of Health Care, it is especially true in the Worcester area.

The data, which many in the field regard as a good indicator of overall health care costs, puts Medicare reimbursements for people living in Worcester and the surrounding area at $10,248 per person in 2006. In comparison, the national average was $8,304 and the state average was $9,379.

No Clear Answers

So, why would Worcester be more expensive?

Experts on health care costs say it's not clear. In some cases, they say, certain areas are more costly because of the characteristics of their residents.

"Medicare patients in Worcester could be less healthy than elsewhere," said Brian Rosman, research director with Health Care For All, which works on health care cost issues in the state. "That could be due to racial and socioeconomic factors. That could be due to environmental factors, obesity…."

It could also have something to do with the hospitals that are available to Worcester-area residents, Rosman and others say. The city's two hospitals, and Saint Vincent Hospital and, particularly, UMass Memorial Medical Center, are full of sophisticated equipment, expensive teaching programs and highly specialized doctors. To support all that, Medicare pays more for the same procedures at the hospitals than it would at a community medical center.

Interestingly, Worcester's costs are slightly higher than those in Boston, which is well known for having a concentration of major teaching hospitals, and which has significantly higher labor costs. (Click here to see all of the statistics.)

Paul Swoboda, an expert in health care payment systems for the University of Massachusetts Medical School's Commonwealth Medicine division office, noted that the Dartmouth Atlas numbers suggest that Worcester residents spend more at hospitals, while people from Boston spend more at doctor's offices. Swoboda said that could reflect more use of expensive emergency rooms and hospital outpatient departments in Worcester rather than health centers or community-based doctors, though it would take more analysis to see if that's actually what's happening.

Stuart Altman, a nationally recognized expert on health care policy from the Heller School for Social Policy and Management at Brandeis University, said Boston has an extensive network of neighborhood clinics alongside its high-cost hospitals, which may help keep costs there from reaching the heights they otherwise might.

Dennis Irish, a spokesman for Saint Vincent, said the way that cost studies look at that additional reimbursement plays a big role in how expensive different areas look.

"Depending upon how you slice and dice it, Worcester could end up being less expensive," he said.

For example, Irish said, a system created by Tufts Health Plan shows Saint Vincent as one of the most effective providers in the state based on its costs and quality of care.

Another related potential factor is the type of care that patients get at different hospitals. Marylou Buyse, president of the Massachusetts Association of Health Plans, which represents insurance providers like Worcester-based Fallon Community Health Plan, said fee-for-service systems like Medicare can encourage doctors to offer more care than necessary.

"The more they do, the more they get paid, so they do a lot more," she said.

Buyse said Medicare Advantage, an alternative Medicare system that reimburses health plans per enrollee rather than per service, doesn't show particularly high costs in Worcester.

"We're not seeing the same pattern on the Medicare advantage side," she said. "Not at all."

Altman said it's common for major academic medical centers to provide more complex treatment for the same conditions than local hospitals.

"It's not that they're all like that, but the mix of people who practice in academic medic centers, they're more likely to be specialists," he said. "They're more likely to engage in more expensive procedures."

Not Waste Central

Still, Altman said the information he's seen on UMass suggests it does a good job reining in that tendency. "It's not a poster child for unnecessary medical care," he said.

In fact, Worcester has come a long way since the 1980s, when it was known as one of the most expensive cities in the country for health care. At that time, Irish served on the board of a group called Worcester Area Systems for Affordable Health Care that formed to address the issue. He said a big problem was that there were seven hospitals in the city, which added up to far too many beds.

"Empty beds tend to attract patients, so as a consequence our health care costs were recognized to be among the highest in the country," he said.

Since then, the number of hospitals has dropped to two, and there's no glut of beds. At the same time, Irish said, WASAHC pushed some costs down by helping move more people into managed care plans.

These days, Robert Klugman, chief quality officer for UMass Memorial Health Care, said, it's certainly true that the academic programs, large plant size and costs associated with being a safety net hospital and a level-one trauma center add to the price of treatment at UMass. But he said the hospital's patients don't end up with longer stays or more procedures than others.

"We're not necessarily doing more things to people," he said. "We don't do any more x-rays or MRIs or anything on patients than the next guy."

To some people, more tests to determine what's wrong with a sick patient might not sound like a bad thing. But the consensus among health care experts is that extra procedures don't lead to better outcomes.

"It's real clear that the places that spend more do not have better health care outcomes," said Rosman.

Many experts nationally, in the state and at individual hospitals are working on the cost conundrum. A big question is not just why an area of Massachusetts like Worcester is expensive but why the state is significantly costlier than the national average.

Klugman and his team at UMass are working to research and address cost issues, while also using tools like electronic medical records to improve the quality and consistency of care. Meanwhile, the state is also looking at ways to reduce costs, including moving away from the fee-for-service model in publicly funded programs.

Whatever changes are made at any level won't be easy, Klugman said, with a tremendously complicated system of medical services that has grown up with limited transparency and oversight.

"Now we're really remodeling a freight train while it's going 100 miles an hour," he said.


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