Johns Hopkins says: Our care isn't too expensive
Pulled from comments. Jeff Nelligan, a spokesman for Johns Hopkins Medicine, responded to my post (A poor excuse for high Baltimore medical costs) on the comparatively high cost of care at Johns Hopkins Hospital and the University of Maryland Medical Center, as calculated by the Dartmouth Atlas Project. The post referenced a Sunday article in the Sun about the subject and noted that the Mayo Clinic is considered a standard for delivering cost-effective care. I'll respond to Nelligan's comments in italics.
There is no doubt that the Mayo Clinic is a world-class medical center. And there is little doubt The Dartmouth Atlas is valuable in purely assessing Medicare hospital costs. But the Atlas — and the Mayo comparisons — haves limitations that cause us, as well as others, to question their results.First, the Dartmouth Group began its study years ago focusing on geographic variations. Baltimore is vastly different from Rochester, Minn., home of the Mayo clinic. Our surrounding population also differs dramatically from Mayo’s in terms of income, education, disabilities, crime rates and employment status. For example, 35 percent of our patients are African-American vs. 2 percent for Mayo; 34 percent are below poverty level vs. 5 percent for Mayo; 29 percent are disabled vs. 10 percent for Mayo; 3 percent have a bachelor’s or higher degree vs. 35 percent for Mayo.
This is Jay. A valid point. Different populations present with varying health problems, some of which cost more to treat than others. As Nelligan notes below, Hopkins patients tend to be diagnosed with multiple chronic diseases more often than those at some other hospitals.
Another example is security. Unlike Mayo, we have to maintain a security force of over four hundred professionals to assure a safe campus for our patients, visitors and staff. The most
striking factor in terms of geographic variation, which is not accounted for in the Dartmouth model, is cost of living. The cost of living index (including costs for food, shelter, tax rates and transportation among others) for Baltimore is 121 compared to 98 for Rochester. This alone would explain 50 percent of the difference between our costs and Mayo in the Dartmouth data.
Not buying this. Johns Hopkins Hospital pulls in $1.7 billion in annual revenue. Whatever security costs exist -- $50 million? (I'm being generous) -- are almost immaterial. And using differences in regional consumer prices to explain variations in medical costs would get you thrown out of statistics class.
Second, Dartmouth has a very limited risk adjustment for differences in the underlying conditions. Our patients also tend to have more associated comorbidities, such as diabetes, hypertension, drug abuse, heart disease, etc., than those seen by many other hospitals. Much of this is attributable to the population difference described above. The Dartmouth model does not account for any of these factors, each of which can have a significant impact on health management strategies and their related costs. The Dartmouth authors suggest that you do not have to account for severity of illness among patients because “the study only focused on patients who died so we could be sure that patients were similarly ill across hospitals. By definition, the prognosis of all the patients in the cohort was identical — all were dead after the interval of observation. Therefore, variations cannot be explained by differences in the severity of individuals' illnesses.”
This is the point I was trying to make on the original post. All the patients were dead within two years, so how can you say yours were sicker?
We find this to be a problematic statement because it assumes that the experience of all patients in the cohort had similar experiences. This assumes that all end-of-life care is the same and the only thing that matters is how much it costs. It does not reflect care that appropriately extends life and/or improves the quality of life. If we provide more care to patients who thus have longer productive lives, this is not reflected in the data associated with Dartmouth.
By following this argument you might conclude that spending $1 billion on extending a terminally ill patient's life by a week is a worthwhile investment. To repeat: All the patients died within two years, so "longer" and "productive" are very relative terms. In an economy with scarce resources, the definition of "appropriately" in the phrase, "care that appropriately extends life," is something we need to talk about.
Third, Dartmouth indicates that more hospital days and more inpatient consults are "aggressive" care versus conservative care. One might argue that patients and their families prefer to be at a place that provides more physician services during their hospital stay — one that doesn’t push them out of the hospital too fast.
Of course this is what patients and families want. Since they're not doctors, they assume that more care is better care. Since Medicare is paying, they aren't worried whether more care is cost-effective. Since docs and hospitals get paid more for more care, more care is delivered. This is the whole problem.
Fourth, their premise that higher costs are not associated with higher quality is based on indicators that may not actually indicate higher quality. For example, indicators such as the percent of people who died in the hospital or in an ICU do not necessarily point to poor quality.
Yeah, some quality studies penalize hospitals in which inpatients die. But this study counted patients no matter where they died. In the data we're talking about, there's only one variable -- how much was spent in the last two years of life.
Finally, it must be understood that because of the all-payor system, unique to Maryland, private payors do not subsidize governmental payors in our state. The Medicare rate we receive in Maryland is higher than other states because our system requires that all payors pay the same rate for a given service at a given hospital. This prevents “cost-shifting” of Medicare and Medicaid due to low reimbursement rates to other hospital. Since the Dartmouth study looks only at Medicare patients, the costs for the Medicare patients in other states appear to be less, but all other patients — that is, all other patients not on Medicare — pay a higher amount than those in Maryland.
A good point, one that was noted in the article by Jamie Smith Hopkins and Kelly Brewington in their article.
We hope that readers can appreciate that a simple comparison between the costs associated with care at Johns Hopkins, the University of Maryland Medical enterprise, Mayo and at many other institutions, does not even begin to tell the whole story. There are many factors that explain these apparent differences, and when these factors are included in the calculations, the differences begin to melt away.
Comments
What if the vast majority of Mayo clinic's terminally ill patients died early on within the 2 year period (which means less associated medicare costs for a person whose end-of-life service lasted for only say under a year?)
Stuff like that isn't factored into the Dartmouth study.
You can't assume that all the terminally ill patients had the same illness and died exactly in 2 years. It's not a accurate depiction of the reality of the situation.
Posted by: RW | December 3, 2009 8:43 AM
So what's your point? If you had a serious illness you would go to JHH -- they are the experts. You'd pay what you had to in order to cure or manage your illness or your loved one's illness.
Should we propose government regulation of JHH's pricing? Would that fix the problem?
Hi CAW: If I had a serious illness as a Medicare patient at JHH, *I* would pay hardly anything in relation to the total cost. U.S. taxpayers would. JHH's Medicare pricing is already regulated. If it's not better regulated, if doctors, hospitals and patients continue getting a virtual blank check from the U.S. Treasury, the country will go bankrupt. What's your solution? -- JH
Posted by: CAW | December 3, 2009 12:12 PM
What are you talking about. How dis-connected are you?!
Posted by: Dunn | December 3, 2009 3:19 PM
The Mayo Clinic is constantly held up as a model for how US health care should operate, but MC is a model that would not work well in most of the country.
Posted by: save_the_rustbelt | December 3, 2009 4:48 PM
Have any of you been to Mayo Clinic? I am not sure how you can assume that the excellence in healthcare at Mayo Clinic could not be applied to the rest of the country. I happen to be at Mayo Clinic right now and the bottom line is they provide quality, compassion, and value that can and SHOULD be duplicated all through the healthcare field in the entire US.
Posted by: KE | December 4, 2009 8:45 AM
KE:
Maybe the excellence in healthcare could be copied but the business model probably wouldn't work in most communities.
Posted by: save_the_rustbelt | December 4, 2009 11:04 AM
You could try going to other hospital for your chronic illness if you want to - but I'm not. My solution is that I will work to be able to pay my own way-because that is my responsibility. By the time I qualify for Medicare it won't exist anymore.
Perhaps Hopkins is willing to try more treatments to cure their patients -- to save their lives than other hospitals. Maybe Hopkins is more dedicated to doing everything possible and has more options to save a life and thus engages in more expensive methods to try to save their patients or extend their lives. Perhaps other area hospitals throw up their hands and send patients to Hopkins right at the point when their health care is the most expensive.
What would you like to cut back on in order to save money on healthcare? Your child's healthcare? Your parents' healthcare? Routine healthcare? Preventative healthcare? That's an interesting question....
Posted by: CAW | December 4, 2009 4:19 PM
CAW laments: "What would you like to cut back on in order to save money on healthcare? Your child's healthcare? Your parents' healthcare? Routine healthcare? Preventative healthcare? That's an interesting question...."
Now we're finally getting down to the real issues involved. But before we do that we need to first distinguish between the totality of "healthcare" and the much smaller portion that involves "insurance" (of any sort and whatever the program).
My own perspective is that individuals should first expect to do just much for themselves independent of ANY insurance and I'll offer as an example just about everything that is routine and scheduled.
Once insurance is (again) limited to the unexpected and unplanned expenses we can reduce the power and influence that HI Companies have over 90% of what constitutes medical services for most of us.
I contend that would be a good thing.
A VERY good thing.
Posted by: MrRational | December 4, 2009 6:34 PM
save_the_rustbelt , you should seriously reconsider your comments. Hopkins serves one of the poorest areas in the US. Mayo serves what population? Furthermore you can search up and find that Mayo dropped 3000 patients who were in the Medicaid program. That's mayo for you.
Posted by: ony | December 6, 2009 2:16 AM
It is no secret that Hopkins also serves wealthy patients, and attracts very wealthy patrons and donors--hence the high-amenities Marburg unit. So the concept that Hopkins costs more to offset the poverty of the local population is really a non-issue. Hopkins's forward-looking attitude toward future medical advances is its glory, but also its downfall since it seems to allow known systems and delivery inefficiencies go unrectified. The cost of such inefficiencies is passed along to the consumer/patient/medical insurance systems. Ever notice the lack of hospital-wide bedside scanning, eMAR, scannable drugs or patient bracelets?
I have to fully disclose that I really like Mayo, and there are some instances even within the state of Minnesota that make Mayo's existence unique. I've also had family and friends admitted to Hopkins, and while I admire certain aspects of their approach, I also see gaps that could further assist their functioning and wonder why no one seems to think the shortfalls as important enough to rectify. They would only help a top-ranked hospital improve even more, and are very doable.
In regard to questions about whether Mayo's practices are duplicatable in other situations, I'm going to say that a lot of them are. Philosophies that dictate aggressiveness of care are just that--philosophies--which can be adopted or discarded. I think Hopkins leans toward aggressive care--which in some instances is completely called for, but in others really has no value other than as a statistic in a study. Trends toward aggressive care at all costs also stems from an overwhelming public viewpoint that unless everything under the sun is tried to cure or help a patient--including new $30k/month chemo drugs with questionable success in trials--that problems will persist in our health care system with no easy fixes. Fixing health care system flaws in the U.S. is very complicated, and I really do not think can be accomplished in one gigantic piece of legislation alone. There are quite a few smaller "sector" fixes that can be implemented, which allows for in-depth analysis of the myriad of problems with a myriad of solutions.
I'm stepping off of my soapbox for the moment, since I tried so hard not to reply to this series of posts b/c I knew I wouldn't be able to stop myself. I also believe that the most ground-breaking medical discoveries that preserve people's lives were made prior to 1960, and everything since has mostly been further slight improvements on the foundation that was laid by scientists and doctors earlier in the century.
Oh, and before I receive the inevitable comment from someone about how I sound like I've never had a seriously-ill family member due to my lack of enthusiasm toward aggressive care, I will fully disclose that my mother was diagnosed with stage 3 ovarian cancer in 1989, and is very alive, well, and cancer-free at the moment. We lived in KS at the time, and all surgery and treatment were handled there. She's very fortunate--as Gilda Radner with the same illness at the same time was not so fortunate. My late father-in-law was diagnosed with a very rare osteosarcoma in 2002, was sent to another very well-known research hospital, given the best treatment, was labelled as being in a very "secure" remission by his expert docs, only to die of the disease in 2006.
Posted by: Laura | December 6, 2009 12:27 PM
Does anyone realize that the Mayo NO LONGER ACCEPTS NEW MEDICARE PATIENTS. What does that tell you? You cannot have excellence with what is being proposed.
Posted by: rs | December 13, 2009 1:13 PM
I am trying to get some information for school. I need some financial reports for revenue, expenses and assets for Johns Hopkins Hospital. It can be from 2006 and 2007. Can you help me. I attend the University of Phoenix. I will provide more personal information if you need it. Thanks. Deborah
Hi Deborah: Everything you need should be on Guidestar.com. You'll need to set up an account but it's free. JH
Posted by: Deborah | April 21, 2010 10:00 PM