Hospital costs under scrutiny

Sunday, January 13, 2013

Last week the St. Louis Post-Dispatch printed a front-page story about the hospitals in Cape Girardeau, which included an unfortunate and misleading headline: "Unhealthy competition." The premise of the story was included in a paragraph soon after: "Cape Girardeau, the largest medical community between Memphis and St. Louis, offers a glimpse into the nation's health care problems. Competition can spark innovation and improve quality of care, but it can also lead to costs that spiral out of control."

The story didn't explain clearly how Cape Girardeau is a glimpse of larger problems in the country, but it did outline how certain surgeries are more expensive in Cape Girardeau than at various hospitals in St. Louis, where economies of scale around surgical procedures are available because of population density. A story basically about costs, it ignored the issue of medical outcomes -- so a headline about "health" was misleading.

Here's why the headline was unfortunate, too. Anyone who knows anything about medical care in Cape Girardeau understands the incredible improvements in quality here due to the competition between the hospitals. If the headline had stated, "Fierce competition," there would be no argument. But to declare the competition "unhealthy" is like calling a new lifesaving cancer treatment bad because it costs more than a previous, less-effective method.

In fact, the Post-Dispatch story indirectly makes this point in a revealing section on maternity services. The story said, "In the late 1990s, babies were born at Southeast Hospital in a ward that had little privacy, and hundreds of premature babies were sent to St. Louis. In 2001, St. Francis re-entered obstetrics after a 35-year absence, building state-of-the-art birthing rooms, and later, a neonatal intensive care unit. Once Saint Francis built postpartum rooms, Southeast followed -- triggering a medical arms race."

Most in Cape Girardeau are thankful for the competition that led to an improvement in quality and brought state and national awards to our local hospitals, rated some of the best in various categories. For those seeking quality or previously unavailable services, fewer patients need to travel to St. Louis, and that means a lot not only to those in Cape Girardeau but also to those who come here from hours away to the south, east and west, who would be facing three- and four-hour commutes [one-way] to get to a metropolitan area. Certainly, for example, the mothers who now give birth in high-quality, private rooms, with neonatal services available, have something to celebrate.

My biggest quibble is with the headline, and there are more than a few holes in the story and a failure to provide context. But there are important points, too. The story outlines a problem that most everyone in Cape Girardeau already knows. The cost for some medical procedures is significantly higher, in some cases concerningly so, in Cape Girardeau than St. Louis. The Southeast Missourian is working on coverage of some of the economic and finance issues in this area. One challenge facing high-quality hospitals not located in metro areas is that some services necessarily will cost more on a per-procedure basis because of the costs to recruit top talent to a market where there will be fewer surgeries.

The Post-Dispatch story touched upon another important issue: "For at least a decade, the crosstown rivals have engaged in a costly race to build new facilities, invest in leading edge technologies, buy new equipment, recruit physicians and offer new services." This, plus advertising, is blamed for the higher costs in Cape Girardeau.

Regarding the "race" to acquire leading-edge technologies, new equipment, top physicians and new services, again, most residents will say unequivocally the results have made health services in Cape Girardeau -- and thus life for those here and in the rural areas around Cape Girardeau -- much better. As for advertising, new services really can't be launched without it. If the hospitals are to offer new services to their wide service area, they have to let people know, or else their investments will be costlier on a per-procedure basis. Comparing the Cape Girardeau hospitals to Barnes-Jewish Hospital in St. Louis, which already has a national [and international] reputation, simply isn't fair.

I do have a concern, and it involves whether new services sometimes are initiated for marketing purposes rather than realistic quality provision and demand. For example, it's one thing to say a service is provided, but if a specialist is doing only one highly complicated procedure a week, there's no way he or she can reach the same proficiency or maintain the same expertise as someone who does the same procedure multiple times a day. Over time, the patient flow will grow, and sustained medical expertise [yes, in competition with St. Louis] will develop. But it would be more efficient, especially in the short run, if the two Cape Girardeau hospitals coordinated and divided some of the costliest and specialist-intensive services.

Bottom line: One of the national problems about health care costs is that patients, understandably, want the highest quality care with the greatest convenience. And when costs oftentimes are masked to consumers, because of insurance -- private or public -- the system doesn't prioritize around cost containment. In Cape Girardeau, thanks to competition, health care has improved dramatically in the last 10 years. Is it expensive? Yes. Do the hospitals need to make sure to balance growth with keeping costs affordable, or even lowering them? Absolutely. But as the Post-Dispatch story, to its credit, indicated, Cape Girardeau's hospital CEOs understand that. It quoted Wayne Smith, CEO of Southeast Health: "Everything we do goes through the filter of highest quality at the lowest cost close to home." And the story pointed to some of the items Steve Bjelich, CEO of Saint Francis, cited as areas management there is focusing on to improve costs.

It's a shame that the St. Louis newspaper chose to sensationalize the story with a headline that doesn't fit.

Jon K. Rust is the publisher of the Southeast Missourian. He can be reached at jrust@semissourian.com

Comments
Respond to this story

Posting a comment requires free registration: