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Cost of health care in area on rise

[As seen in the Mankato Free Press] By Brian Arola,, Oct 12, 2016

MANKATO — Medical care costs for insured patients in Minnesota rose by more than 5 percent last year, according to new data analysis.

The 5.6 increase in medical costs statewide is the biggest since the MN Community Measurement nonprofit started releasing cost of care data for medical groups two years ago.

The nonprofit measures costs by tallying insurance claims made by the more than 1.5 million patients enrolled in the four health plans available in Minnesota last year.

On top of being a larger increase than the 3.2 percent one highlighted in last year’s report, the uptick also far outpaces income increases for Minnesotans over the same time period.

Jim Chase, president of MN Community Measurement, said that’s a concern for families trying to keep up with medical costs.

“That’s worrisome when you think of how much pressure there is on families,” he said.

Higher costs in Greater Minnesota, where there are fewer options available to patients, are also a problem, he said.

The cost of care for insured patients at the medical groups included in the report ranged from $365 to $914 per month. Area medical facilities fell in the middle of the two marks. Mayo Clinic Health System in Mankato came in at $534 per month, a 2.9 percent increase from the previous year. Mayo facilities in St. James, Waseca and New Prague all came in lower per month — New Prague, at $461 per patient, being the lowest.

In a statement, Mayo Clinic Health System spokesman Micah Dorfner said measuring costs for care at destination centers such as Mayo Clinic can be complicated. While the clinic supports efforts to transparently measure costs for care, distinctions should be made in the data to reflect the difference between complex care and community care. As a health system, Dorfner said steps are being taken to mitigate costs.

“Mayo Clinic Health System continues to take significant steps to manage cost of care, including improving access, reducing costs and increasing transparency,” he said.

Mankato Clinic saw a larger increase in cost of care than the Mankato Mayo over the past year — 11.7 percent — but still had a lower overall cost at $490.

The increase from year to year could be explained by a variety of factors, said Randy Farrow, CEO of Mankato Clinic. Pharmacy costs, an unusual number of major medical procedures in a given year, or more visits associated with preventive care could all lead to higher costs for care, he said.

Of the factors the clinic can control, Farrow said it’s typical to have about a 2 to 3 percent increase in costs per year, mostly to make up for inflation and wage increases.

Pharmacy costs were one of the factors Farrow said the clinics don’t control — apart from their willingness to prescribe generic drugs — but they could still be attributed to the clinic in insurance claims. At a 9.3 percent increase, take-home pharmacy costs were the services with the largest increase from last year.

In an unintentional way, preventive care could also be a driver of increased costs. Farrow said if clinics are encouraging patients to be proactive with their health, it could lead to more visits to the clinic in a given year. More visits equal higher costs for care, although the short-term expense should be eclipsed by cost savings related to maintaining a healthier lifestyle in the following years.

Whatever the cause of the increases, Farrow said the transparent cost for care measures are good from both a patient and medical group perspective.

“It’s good to start having people see this data and be more transparent,” he said. “I think it’s going to make us all better and more competitive because we know price is an issue.”

The issue isn’t expected to go away next year either, Chase said. Premium hikes for individual insurance plans announced recently could foretell a similar increase in cost of care next year.

“I’m guessing we’ll see continued acceleration of health care costs, and that’s worrisome,” he said.
Follow Brian Arola @BrianArolaMFP.