Select Page

Yesterday, NICHE shared an analysis of the Rand Report–a study of hospital prices in Indiana. Some perspective–and questions:

1. The Rand Study began with an admission that employers lacked ways to judge value and near the end commented that Parkview’s prices may be justified by “higher quality.” Missing, we feel, is the word in the report’s title, namely transparency.

2. Medicare Hospital-Compare (MHC) is at least a beginning to reveal hospital deficiencies. MHC shows differences between hospitals in performance, complications and patient experience. For example, it is clear from data that too many patients per nurse lead to poor patient experiences, patient falls and even medication errors.

3. But while a great deal may be learned from MHC data, Medicare Compare is barely enough. Reports of inspection findings from The Joint Commission (TJC) are not available and won’t be—as NICHE reported earlier–until Congress approves the CMS initiative to make public all inspection deficiencies. Actual employee ratios are not supplied. And simply stated, if publicly reported restaurant inspections show rodent or cockroach infestations, why should not rodent and cockroach infestations be reported at hospitals?

4. Until then, employers and the public must rely on anecdotal reports from friends, physicians, nurses and staff in addition to Medicare Compare and importantly, the reputation of the hospital in its community.

5. Employers should have listed on their Rand Report “To Do” list, all of the data they need to confirm quality, and value. Data, evidence to support value, is what is needed. High prices don’t guarantee value, and low prices may not be a bargain.

6. The cure for high prices is high prices, but only if the market is allowed to function and information is free-flowing–leading to effective competition.

7. People expect to pay more at certain restaurants and to pay more for certain automobiles. We struggle to provide equal access to law and to justice, but we pay more for certain lawyers. Also, as a nation, we have no minimum standard of medical care that we expect for all its people, and so we struggle to provide a floor, and we have too few ways to measure increased value, for which we should expect to pay more. We know that all physicians are not equal, but we tend to price their services as if their services were fungible.

8. Until adequate data is available to determine value, NICHE will be fair in reporting occurrences and relevant data about health care in northeast Indiana. And to the question of “are Parkview’s prices too high,” we can only answer that we don’t know the proper price for four-star quality. Alternatively, one might answer with a question: are LHN prices low because their lower staffing costs allow them good profit margins while seeking buyers who judge on price alone. Enter John Ruskin: Anything can be made cheaper. Without more data to compare, employers cannot answer, and neither can we.