PITTSBURGH, March 26, 2012 /PRNewswire/ -- To provide its members with a baseline understanding of health care delivery and costs in the Pittsburgh region, the non-profit Pittsburgh Business Group on Health (PBGH), an employer-led coalition, commissioned a health care market analysis that found the Pittsburgh region uses substantially more health care services, than comparative markets — Cleveland, St. Louis, and Cincinnati. As analyzed, the Pittsburgh region's annual burden for additional hospitalizations was $187 million.
The Health Care Incentives Improvement Institute (HCI3), a non-profit organization focused on improving health care quality and value through evidence-based incentive and provider payment solutions, worked with PBGH to analyze the market comparison to better understand the relationship between the supply of hospital beds and the frequency of hospitalizations in the four comparable U.S. metropolitan areas. The findings and recommendations were released today in an HCI3 Issue Brief. The initial research was conducted by FORTE Information Resources.
"Due to the uncertainty of the changing landscape of health care, nationally and in the Pittsburgh region, and the potential impact this may have on employers' benefits programs, it was critical to develop a baseline understanding of the delivery and cost of health care in our market," said M. Christine Whipple, PBGH executive director. "It was equally important to determine if the cost and use of health care services is different, and if so, examine how and why. We found that the higher use of services in the Pittsburgh region is producing higher costs for health care. However, without knowing the actual payments to providers for health care services (and the link to the information), it is unclear just how much more employers, and their employees, are paying for health care in our region."
Cheryl Melinchak, PBGH board president and director, Benefits, Westinghouse Electric Company, LLC, indicated, "These studies raise thought-provoking questions about health care in the Pittsburgh region. Based on this type of information, and the current climate, employers have the best opportunity in years to influence the payments and delivery of health care services in our region."
Results
Both Cleveland and Pittsburgh have a higher number of beds per 1,000 residents than are found in Cincinnati or St. Louis. Among these communities, Cincinnati has the fewest hospitals, yet its occupancy rate is among the lowest despite having one of the highest Medicare patient case mix severity adjustments. Adjusted length of stay is second only to that of Pittsburgh.
"Whether one compares U.S. regions or the care major academic medical centers provide — a large fraction of the nearly two-fold differences in per-patient costs that are observed, after accounting for patient case-mix, are due to differences in utilization rates of supply sensitive services," said Elliott S. Fisher, MD, MPH, professor of Medicine at the Dartmouth Medical School and director, Population Health and Policy at The Dartmouth Institute for Health Policy and Clinical Practice. "Patients cared for in regions that have a greater relative supply of beds and physicians spend more time in the hospital, have more frequent physician visits (especially by specialists), and get more diagnostic tests and imaging services."
Francois de Brantes, HCI3 executive director noted, "By making data available on the costs and quality of care, we can better identify where employers, insurers and providers can collaborate to improve health care in Pittsburgh. Two such areas are payment reform and the use of value-based purchasing and benefit designs. Employers should demand from their health plans new payment models that impose financial risk on providers for excessive and unwarranted use of services. Additionally, Pittsburgh's employers would benefit by being more aggressive in incenting employees to use low cost, high-value providers. Benefit designs can provide the practical way to drive employees to use higher value hospitals that can result in providers moderating their price increases."
Study methodology
Two separate analyses were conducted to measure total hospital capacity in each community and the contribution of that capacity to health care costs. First, PBGH commissioned FORTE to develop the Pittsburgh Health Care Market Comparison, which provides a market assessment of demographic and general health care characteristics, hospital utilization and discharge analyses of specific diagnoses and procedures in each of the four regions. Secondly, HCI3 standardized the community-wide information and using its internal benchmark data of commercially insured health plan members estimated the average national cost of a bed day. This estimate was used to compare the potential added cost of hospital usage on total health care costs in Pittsburgh against that of the other markets.
About the Health Care Incentives Improvement Institute™, Inc.
The Health Care Incentives Improvement Institute, Inc. (HCI3) is a non-profit multi-stakeholder umbrella organization for Bridges to Excellence® and PROMETHEUS Payment®. The mission of the organization is to create significant improvements in the quality and affordability of health care by developing and implementing programs that recognize and reward physicians, hospitals and other health care providers that deliver safe, timely, effective, efficient, equitable and patient-centered care. HCI3 offers a comprehensive package of solutions to employers, health plans and coalitions to improve the flawed incentives that currently permeate the U.S. health care system. www.HCI3.org
About the Pittsburgh Business Group on Health
Founded in 1981, the Pittsburgh Business Group on Health (PBGH) is an employer-led coalition representing over 80 members regional and national members. The coalition, promoting education, collaboration, and innovation to manage costs and drive value in health care and benefits, raises awareness and highlights leading edge strategies through its community forums, members' only meetings, annual conferences and health care market analyses and benchmarking surveys. www.pbghpa.com.
NOTE TO EDITORS: The PBGH Pittsburgh Health Care Market Comparison available to accredited media upon request.
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