MNCM News

"The two words ‘information’ and ‘communication’ are often used interchangeably, but they signify quite different things. Information is giving out; communication is getting through." -- Sydney J. Harris

Area’s Health Care is Most Expensive

By Jeff Kiger, Rochester Post Bulletin
June 18, 2015

The cost of health care in southeastern Minnesota was higher than in any other region in the state or even neighboring states in 2013.

The nonprofit MN Community Measurement released a new analysis of its Total Cost of Care report this week. Total Cost of Care, which was first released in December 2014, looked at the costs of 1.5 million patients at 1,052 clinics in Minnesota and border cities. It tracked patients covered by the four top insurers – Blue Cross & Blue Shield of Minnesota, HealthPartners, Medica and PreferredOne.

This week’s analysis compared costs for those patients treated in six Minnesota regions, Wisconsin, North Dakota and South Dakota. It also broke the numbers down by adult patients versus pediatric ones as well as in-patient care to out-patient costs this time.

While the latest report did not reveal any new findings, it adds to the very new pool of health cost data using this new standard measurement.

“This is just another step in sharing information that we thought might be useful,” said MNCM President Jim Chase.

The average monthly cost of care per patient in Minnesota is $435. That monthly cost spiked to $535 in the southeastern area. That’s not surprising with Mayo Clinic, the most expensive provider at $826 a month per patient, based in Rochester. Olmsted Medical Center’s not far behind, as it’s ranked as seventh most expensive out of 115 medical groups.

North Dakota came in with the lowest cost health care at $415 per patient per month, but the Twin Cities area was almost as low at $416. Northeast Minnesota was the second most expensive region at $497 per patient per month. Wisconsin was the third highest at $471.

Those totals are calculated as general costs for treating adult and pediatric patients, while factoring in “risk factors,” according to Chase. Mayo Clinic’s monthly adult patient cost is $972, and its pediatric patient cost is $425. OMC’s adult cost is $677, and its pediatric one is $223.

Both Mayo Clinic and OMC question the validity of how MNCM calculates the monthly patient figure, though they support the effort to create a standardized method to track health-care costs.

“Because Minnesota Community Measurement’s methodology has not changed from last year, we remain concerned that the report does not accurately reflect cost of care at a Destination Medical Center where the sickest, most complex patients are referred and treated,” stated Dr. John Wald, medical director for public affairs and marketing for Mayo Clinic.

Jeremy Salucka, OMC’s marketing and communication coordinator, agreed with Wald.

“It is important that patients and health-care consumers understand that the MN Community Measurement cost of care resource is not perfect and, at present, cannot present the ‘full picture’ of the complex calculations and factors involved in determining costs for individual patients,” he wrote in reaction to this week’s report.

Salucka added the 11,584 OMC’s patients used for this report accounted for just 15 percent of the total patients the hospital served in 2013.

“The science of cost measurement is still in its infancy and we are committed to engaging with Minnesota Community Measurement and other groups to create measures that are valid and meaningful to patients, health care providers and payers,” stated Mayo’s Wald.

Chase acknowledged the calculations might not be perfect but said they are much better than the industry’s previous hodgepodge of methods that couldn’t be used to compare “apples to apples.”

The methodology is endorsed by the National Quality Forum, and it is considered “the gold standard of health-care measurement,” he said. Four other states, including California and Colorado, are using this method and others, such as Wisconsin, are considering adopting it.

MNCM officials have met with medical groups, such as Mayo Clinic, to discuss the methodology since the first report came out in December.

“We’re very open to that discussion,” said Chase. “What we hope is that there’s mutual learning there.”

This regional study offers a snapshot of costs MNCM would like medical groups to use while looking at their own costs and possibly make some adjustments to improve price and quality.

Companies that provide insurance benefits might use this study to find a place with the best, but most economical health-care offerings to locate a facility, according to MNCM.

For patients, it provides a more complete picture of the price range of care that’s available, Chase said. Some patients in need of non-urgent procedures, such as knee replacements, might use it to find a nearby medical center with a better price point.

“But it isn’t about everyone going to North Dakota for the cheapest care. This just gives more perspective and more options for patients,” he said.

MNCM will be releasing its 2014 study in this fall, possibly by Labor Day.