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City workers' choices for care impact the bottom line

New Hampshire Union Leader

May 20. 2012 8:28PM

MANCHESTER - Where a city employee gets a medical procedure done could mean the difference of thousands of dollars for taxpayers.

An MRI on the knee of a city worker costs about $800 at Bedford Ambulatory Surgical Center. When the same procedure is done at Elliot Hospital, it costs $1,700, according to medical cost data compiled by the state-run website

If that MRI shows surgery is needed, that procedure costs about $3,276 at Concord Ambulatory Surgery Center, $4,282 at Dartmouth-Hitchcock South and $7,394 at Parkland Medical Center in Derry.

Manchester is self-insured, which means employee medical bills are paid directly from city funds. According to Anthem Blue Cross Blue Shield New Hampshire, which oversees the city's billing and payments, there can be wide variations in the cost of procedures in the Manchester area.

The difference in cost for a knee surgery can vary as much as $7,000 among providers. Basic tonsil and adenoid removal can vary as much as $2,600; cataract removal can vary about $4,900; and shoulder surgery could cost $6,200 more at one provider compared with another.

To help keep costs down, the city encourages employees to use the COMPASS Smart Shopper program, which offers financial incentive for going to less expensive doctors. The University of New Hampshire offers a similar program, Tandem Health Advantage, to help keep down its rising employees health care costs.

But for residents who don't have access to these programs, it can be difficult to comparison shop for medical procedures.

'This is a big national issue, price variation, and it's nothing unique to us. It's just the state of health care. I can't say why the system has evolved that way,' said Lisa Guertin, Anthem's president. 'We're trying to reduce the variation in our reimbursement and do our part to negotiate rates that are as close as possible, but this is a bigger systemic issue.'

Ned Helms, director and clinical professor at the New Hampshire Institute for Health Policy and Practice at the University of New Hampshire, said the difference in cost is largely driven by the hospitals and insurance companies.

'The reason people are charged differently is because each of the hospitals negotiate differently with the carriers and each hospital has different goals they set on the margins they need to operate,' said Helms. 'They then come up with a strategy for what they will charge for one service or another.'

Elliot Hospital CFO Rick Elwell agreed that charges sometimes have to balance procedures that are costly to the hospital, such as behavioral health treatment and pediatric care. When it comes to getting people more involved with their own health care, Elwell said, he has seen little impact from programs such as COMPASS and suggested there are better ways to encourage patients to shop around.

'I think the biggest issue we've got out there today is employees don't understand their health insurance,' said Elwell. 'Not until they get the bill do they understand what their benefits are.'

Helms said patients in the past have not monitored these costs, so getting them to do so now could be difficult.

'It's the employee and employer paying premium, (who) haven't really been part of the discussion,' said Helms. 'The reason people are charged what they are is because the (providers) can.'

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