Controlling Costs Rests on Hospitals
Oregon hospitals made more than $325 million in profit last year, down from 2007
“We should point fingers at nonprofit hospitals, not insurance companies,” said Kilo, at a Portland City Club event on Oct. 29 focused on cost containment. “Instead of talking about health insurance reform, we should be talking about reforming our healthcare delivery system.”
For example, Oregon Health & Science University spends hundreds of dollars competing for cardiac care, cancer and other high cost medical procedures, while spending lots of money on billboards and advertisements to promote its hospital’s services.
“It’s a medical arms race,” said Kilo, who’s on the board of Regence BlueCross BlueShield of Oregon and also runs the Oregon Better Health Initiative. “What they build isn’t justified.”
Hospitals, he said, have become quite sophisticated in hiding codes, which have helped them make significant amounts of money. Defending himself for “bashing hospitals,” Kilo said “they deserve it, but they’re also my friends.”
Last year, Oregon's 57 hospitals earned more than $325 million in profit, down from 2007 when their profits were more than $520 million, according to financial documents obtained from the Oregon Office of Health Policy and Research. Also in 2008, hospitals took in more than $7 billion in revenue from patient care, an 8.5 percent increase from 2007. Those same hospitals wrote off $1.02 billion in uncompensated care in 2008 and $874.7 million in 2007.
Kilo called upon physicians to take an active role in bringing about reform. “Where has the doctor’s voice gone on rational end-of-life care?” he asked. “It’s our job to look in the mirror. We’ve met the enemy and the enemy is us. If we want to change expectations, we need to lead that change. Come together and look each other in the eye, and have the conversation and be rational participants in reform.”
There’s lots of waste in the system. Studies indicate that all the new technology during the 1990s saved 170,000 lives. Had that money been spent on education, eight times as many people would have survived.
In July, Kilo co-authored a commentary on the harmful effects of healthcare that appeared in the Journal of the American Medical Association. Kilo Larson Health Harm Commentary JAMA 7-09.pdf (150.18 KB),
“Higher-intensity care generally does not improve survival,” he wrote, “and complications of medical care accounted for 1.1 million hospitalizations in 2006 – costing nearly $42 billion.
“Although health care’s objective should be to improve health,” he continued, “its primary emphasis has been on producing services.”
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Comments
Hospitals for the last few decades have occupied the number 1 cost slot. Oregon has maintained a not so publicly available data base stating the discharge billing of all hospital discharges in the State. Those billings show a nearly 3 fold variation in hospital charges for the same diagnostic conditions. Hard to imagine how we get to a value oriented culture, when price is of so little interest to so many people including policy makers. Whining is not a plan for execution....but I guess "hope" works.
What database is that?
I believe this is it: http://www.oregon.gov/OHPPR/RSCH/comparehospitalcosts.shtml
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