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Some hospitals were paid more

But care quality is found similar

By Liz Kowalczyk
Globe Staff / May 26, 2011

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New health care data from the Patrick administration confirms that some Massachusetts hospitals are paid significantly more than others for providing similar care, but it shows that these differences are even more dramatic for certain common procedures like caesarean births.

Cambridge Health Alliance was paid less than $5,000 each for 55 caesarean sections performed in 2009, while Massachusetts General Hospital was paid more than $10,000 each for 483 caesarean deliveries that year, state officials found.

They said it was unclear why insurers paid some hospitals dramatically more, since officials found no obvious differences in quality of care, and their analysis allowed for instances in which hospitals treat sicker patients.

Disparities in payments were first documented by Attorney General Martha Coakley’s staff last year, which concluded after an investigation that the highest paid hospitals had more market clout, some because of their brand names, but that they were not necessarily providing better care. The new report, which the governor’s office planned to release to the public today, mirrors Coakley’s initial findings.

How much hospitals and doctors are paid and whether those payments are justified are central issues as the state and private insurers search for ways to control soaring health care costs.

Dr. JudyAnn Bigby, Governor Deval Patrick’s secretary of health and human services, said in an interview that while some people have argued that reducing the disparities among providers would be too expensive, the analysis shows that is untrue. If the range of payments is narrowed to bring the lowest-paid providers up 20 percent and the highest-paid providers down 20 percent, insurers would actually save $267 million, she said.

The Division of Health Care Finance and Policy is required by law to conduct an annual study of health care costs in the state and to hold public hearings on the issue. The hearings are scheduled for June 27 to June 30.

The division analyzed payments from five health insurers to hospitals and doctors for care provided to their members in 2009, about 60 percent of privately insured people in Massachusetts. Bigby said the findings support passage of the governor’s bill to control health care costs, because it would require state officials to examine whether teaching hospitals and hospitals that serve many poor patients, for example, have higher costs that justify higher prices.

In a separate report, also to be released today, the administration examined health insurance premiums. It found that they increased 5 to 10 percent annually from 2007 to 2009. At the same time, people received fewer benefits and paid higher copayments and deductibles.

A slowdown in spending because of the recession and “insurers’ significant reserves,’’ Bigby said, should lead to lower premiums.

“We’d like to see premiums come down,’’ she said.

Liz Kowalczyk can be reached at kowalczyk@globe.com.