State hospitals, insurers work to control costs
by Patrick McCreless
Dec 05, 2012 | 4298 views |  0 comments | 14 14 recommendations | email to a friend | print
Heath care is not cheap but efforts are under way among Alabama hospitals, insurers and medical organizations to control costs.

A report Sunday on the television program “60 Minutes” alleged that Florida-based Health Management Associates, which owns hospitals around the country including Stringfellow in Anniston, established quotas for increased patient admissions to make more money. The company has flatly denied the accusations. Regardless, officials from other area hospitals, insurers and the Alabama Hospital Association say that due to rising health care costs, it’s in the medical community’s best interests to keep expenses down by ensuring all patient admissions and treatments are necessary.

According to a September report from the Institute of Medicine, the cost of unnecessary care is significant. The report estimates that about $210 billion is wasted each year on unnecessary medical services.

Attempts to obtain a comment from Stringfellow Tuesday were unsuccessful.

David McCormack, CEO of Regional Medical Center in Anniston, said his hospital has internal mechanisms to keep an eye on admissions and keep costs down.

“We have two staff administrators who act as quality control,” McCormack said. “We’ve set up a whole unit just for this.”

McCormack said these administrators especially make sure Medicare patients who are admitted fit federal criteria and regulations. In the “60 Minutes” report, it was alleged that Health Management Associates had a policy of intimidating physicians to admit Medicare patients to hospitals, regardless of whether it was necessary.

McCormack said that due to the way federal reimbursements are set up, a hospital can receive about $3,000 more from Medicare if a person is admitted as an in-patient instead of an out-patient. An in-patient is a person kept at the hospital for at least a day while an out-patient just stays a few hours for treatment or diagnosis. A standard hospital stay for one day at RMC, not including overhead like electricity and equipment, costs about $2,000, McCormack said.

Due to that higher cost to the taxpayer, RMC tries to admit Medicare patients as out-patients whenever possible.

“Those people still need to be in the hospital … but they get charged a lot less for out-patient,” McCormack said. “It costs us the same, it’s just the billing from Medicare is different.”

As far as private insurers are concerned, Blue Cross Blue Shield of Alabama does everything it can to keep costs down and only do what is necessary for the patient, wrote Koko Mackin, spokeswoman for Blue Cross, in an email to The Star.

“We use evidence-based, appropriateness-of-care criteria to follow all of our members when they are in the hospital for medical care,” Mackin wrote. “We have physicians and nurses who daily help track our members throughout their hospital stays.”

Mackin wrote that Blue Cross also collaborates with hospitals to reinforce the use of evidence-based criteria for care and does routine audits on all hospitals in its network.

“What we want is the right care, at the right time, by the right provider, in the best setting,” Mackin wrote. “We strive for appropriate care for our members in all settings.”

Rosemary Blackmon, executive vice president of the Alabama Hospital Association, said her organization and state hospitals are currently working with the Centers for Medicaid and Medicare Services, or CMS, through a program called Partner for Patients, to lower medical costs. One of the goals of the program is to reduce readmissions to hospitals by 20 percent by the end of next year.

“The idea is to make sure patients get well and do not have to come back,” Blackmon said.

Blackmon said CMS provided the hospital association with grant money to handle the program.

Blackmon also said that insurers like Blue Cross and CMS are cracking down on costs for infections caught in hospitals, forcing them to improve their services.

“If a patient gets something while they are in the hospital … the insurer’s not paying for that,” Blackmon said.

Blackmon added that since Alabama receives such low Medicare reimbursements compared to other states anyway, hospitals in the state do as much as possible to lower costs elsewhere. According to statistics from CMS, the way payment methods are structured, Alabama receives lower reimbursements for medical services than most other states in the country.

“Certainly hospitals try to find ways to be more efficient … because of the reimbursement structure here,” Blackmon said. “If they don’t get patients well, then they lose money — if they don’t have low costs, they’re not going to make it.”

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.
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