Sunday, February 13, 2005

"A Vested Economic Interest" in the Outcome of the Battle Over Angioplasty

Re: my discussion earlier of price versus value, see this article in the Boston Globe about how community hospitals are battling for authorization to do angioplasty in the Boston area. (Regulations now prevent hospitals who don't have facilities to do coronary artery bypass grafts from doing angioplasty, based on the concern that such hospitals would be unable to cope with acute adverse events from the procedure.)
The chief of interventional cardiology at the Beth Israel Deaconess Hospital said, "we have to realize that we have a vested economic interest in the outcome [of the debate about which hospitals can do angioplasty]" He then noted that about 40% of the $17K - $20K that hospitals get from Blue Cross for the procedure is profit.
This is an example of how insurance and managed care companies do not have a clear idea of the actual costs of an imporant, expensive service they pay for. Whether they have a better idea of its value to the patient is questionable.
Rather than leaning on primary care physicians to reduce utilization of such expensive services, wouldn't it make more sense to bargain down the hospital's profit margins to something less than 40%?

No comments: