Tag Archives: business of health care

N.C. series explains high cost of cancer drugs

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

As part of an ongoing series on the cost of health care in The Charlotte Observer and The News & Observer in Raleigh, N.C., Ames Alexander, Karen Garloch and Joseph Neff put together a two-part examination of why independent oncology practices are vanishing and what effect that trend is having on the cost of cancer care.

In the end, it seems to come down to one simple fact: The system strongly incentivizes hospital-based oncology practices by essentially allowing them to charge more than their independent competitors.

…when hospitals buy (independent) practices, prices go up. Patients are billed based on the hospital fee schedule.

Nationally, chemotherapy costs 24 percent more in a hospital-based outpatient setting than in a doctor’s office, according to a study by the consulting firm Avalere Health.

“The suggestion that when a (physician) group comes to us … we raise their prices, that’s not true,” said Carolinas HealthCare President Joe Piemont. “When the group comes to us, they charge our prices. … These are our negotiated rates with (private insurance companies).”

While there are many other factors involved, the basis for the differences is that hospitals can bill insurers at higher rates because they have more leverage when negotiating. Hospital representatives say the higher prices go, at least in part, toward charity care, as well as additional services not provided by an independent practice.

Reporters hoping to replicate the trio’s work would do best to start with their July AHCJ article explaining how the series had come together, as well as their latest “How we reported this story” sidebar, located partway down this page.

Financial documents help explain independent, not-for-profit hospital’s challenges

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

In the Tampa Bay Times, Letitia Stein writes about a local independent not-for-profit hospital that’s struggling financially and may be looking for a buyer. In some ways, it’s more business story than health story, but Stein relied heavily on the same public financial documents that AHCJ members use regularly, and fleshed them out with the help of familiar sources.

Bayfront’s financial statements help explain the interest in a partnership. In 2011 and 2010, its operating margins, key indicators of its core patient-care business, were razor thin — less than 1 percent, state records show.

In 2009, the operating margin — the difference between patient-care revenues and costs — was $4.8 million in the red.

To add context to those numbers, Stein talked to local and national experts on the business of health care. For example:

“It seems to me the biggest challenges are how to survive when revenues are barely growing and (Bayfront) has a very large Medicare and Medicaid share with few privately insured (patients),” said Mark Pauly, a professor of health care management at the University of Pennsylvania’s Wharton business school, who reviewed Bayfront’s 2011 state financial filings.

The story itself is a snapshot of why independent not-for-profit hospitals are an ever-rarer breed, but more importantly, it’s an example of how a well-trained health journalist can take a straightforward business story and tie it into the larger narrative of a region’s health care ecosystem and economy with the help of the right documents and sources.

AHCJ tip sheets

Special, easy-to-get medical credit cards seduce providers, desperate patients

About Andrew Van Dam

Andrew Van Dam of The Wall Street Journal previously worked at the AHCJ offices while earning his master’s degree at the Missouri School of Journalism.

The (Bergen County) Record‘s Lindy Washburn reports on health care professionals who offer specialized credit cards which can cover certain health costs and can be acquired on site, often in the time it takes to go from diagnosis to emergency procedure. Washburn writes that many providers prefer these cards and it’s easy to see why.

The health care provider receives payment in full when the bank gives its “instant approval” to the patient’s credit application — even for care and services that would normally be billed over weeks or months. That has left patients thousands of dollars in debt — and paying interest rates of 24 percent or more — for care they didn’t receive or even agree to.

So, while some providers love the instant payments, Washburn writes, “state officials are investigating whether medical professionals are violating New Jersey’s consumer fraud law amid allegations that some health care providers have abused these credit sales.”

Among the complaints: Doctors, dentists and others pressure patients to “sign on the dotted line” when they’re vulnerable or in pain; they recommend more costly treatments than necessary, knowing the lending company will pay; and they fail to complete the promised treatment once the money is in hand.

In her CJR post on Washburn’s story, Trudy Lieberman, AHCJ’s immediate past president, writes that such arrangements are likely to become even more popular as co-pays and deductibles rise, and thus urges reporters to dig deeper into “what rights and protections consumers have in this brave new world of health credit cards.”

What I wanted to know is where are the protections of the federal Fair Credit Billing Act. Do they apply? How? What can someone do if they are pressured and treatments are not done?

And if there are not enough protections in place, should there be?