A new report from a Minnesota nonprofit is shedding light on why some medical clinics are more expensive than others — determining which ones simply charge higher prices, and which order more services such as tests, follow-up visits and prescriptions.
Identifying expensive clinics is important in an era of rising health care costs because it allows patients to be better shoppers, said Jim Chase, executive director of Minnesota Community Measurement, a nonprofit agency that analyzes claims data from the state’s largest health plans.
The report, released Tuesday, also may pressure high-cost clinics to become more efficient.
“If we continue to have these kinds of price increases,” Chase said, “people aren’t going to be able to access care that they can afford.”
Total costs have been reported for clinics in Minnesota and western Wisconsin for the past three years, but not at this level of detail.
Baldwin Area Medical Center in Wisconsin, for example, appeared more expensive in 2015 due to its charges, which were 18 percent higher than average, the report showed. The medical center’s resource utilization — a measure of whether it ordered more care per patient — was only 1 percent higher than average.
Conversely, Richfield Medical Group had higher costs because of the amount of services ordered; its resource utilization was 16 percent higher than average in 2015, even though its prices were 9 percent lower than average.
Seven medical groups accounted for 50 percent of the 1.5 million Minnesotans in the study, meaning they were the patients’ primary care providers. Variations in costs and use were much smaller among those clinic groups: Allina, Essentia, Fairview, HealthEast, HealthPartners, Park Nicollet and Sanford.
In general, smaller, rural clinics were more expensive — often because of higher prices. But Chase said there were exceptions, and that it will be important to understand why some clinics in challenging rural environments were able to better manage their costs.
The Stellis Health clinic in Buffalo, for instance, was 8 percent lower than the state average on prices and 10 percent lower on the volume of care its patients received.
Richfield Medical Group’s standing as a high user of health care services is deceiving, said Carol Lucio, administrator of the four-doctor clinic. Expanded clinic hours and other efforts to reduce unnecessary care resulted in the group being more than 10 percent below state averages on its patients’ uses of emergency rooms, radiology and inpatient hospital care.
High and rising prescription drug costs have been the clinic’s bugaboo, especially if one patient has a condition requiring a new, high-cost specialty drug, Lucio said.
“If we put people on this new psoriasis medication that Phil Mickelson is [promoting],” she said, “it’s $30,000 to $40,000 a year.”
Clinics across the state faced much the same dilemma: While the total cost of care increased 5.6 percent overall from 2014 to 2015, the total cost of pharmacy spending increased 9.3 percent.
The report is based on health insurance claims for commercially insured patients covered by Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica or PreferredOne. Patients were assigned to primary care clinics based on claims data that showed the clinics they used most frequently. Patients who didn’t go to their doctors in 2015 were not included.
Costs for a primary care clinic include the costs of their patients going to specialists or to hospital emergency rooms. While doctors can’t control when patients use these other services, Chase said they can refer patients to more efficient specialists. Doctors also can be more judicious about when to send their patients for costly ER visits.
The report also showed variation in costs of individual services by clinic. The average knee X-ray was only $20 per patient at Hennepin County Medical Center clinics, but $82 at the Mankato-based Orthopedic & Fracture Clinic and $219 at the Red Cedar clinic in Menomonie that is affiliated with the Mayo Clinic.
Once again, Community Measurement’s data showed Mayo Clinic in Rochester as particularly expensive — a frustration for its leaders, given their national reputation for high-quality but efficient patient care. Many of its affiliated clinics had higher prices as well, though their patients tended to use care more efficiently.
While the analysis is adjusted for risk — so that clinics with sicker patients can be evenly compared with clinics that have healthier patients — Chase said Mayo and its global patient population does present some challenges for the statistical analysis.