Medical spending is up 5.6% in Minnesota, but clinic costs vary widely

Medical spending in Minnesota climbed 5.6 percent in 2015, to $474 per person, according to the third annual Total Cost of Care report by a nonprofit watchdog group, but costs varied dramatically from one clinic to another.

Privately insured patients at the Synergy clinic in White Bear Lake had the lowest costs — $365 in 2015 — while those using the Mayo Clinic in Rochester for primary care cost the most on average, at $914.

Such wide ranges have turned up in previous reports from Minnesota Community Measurement (MNCM), but the report released Wednesday is significant because it shows trends over time — and what types of medical services are driving up costs.

About 70 percent of Minnesota clinics saw their costs go up.

"Health care inflation is ... surging back a bit," said Jim Chase, executive director of the measurement organization, "certainly more than people are getting in terms of average increases in their income."

As a result, Chase predicted that more patients will go shopping for clinics by costs. His nonprofit publishes the data annually, along with quality data indicating how well clinics manage common conditions such as diabetes and depression.

Even if insurance pays most of the bill, "you're paying your insurance companies' premiums," Chase said, and those rise and fall with overall medical spending. "So this is the kind of thing that should matter to people as they're thinking about where they are going to go for their care."

Some high-cost clinics nonetheless balk at the data, which comes from the claims of Minnesota's four largest health insurers.

Mayo officials have long supported the MNCM effort while questioning the methodology, which often makes their world-renowned facilities look expensive. Among their concerns: Whether patients traveling to Rochester for treatment of complex diseases get artificially assigned to Mayo as their source of primary care.

"Until measurement tools are able to resolve issues, such as attributing each patient the right level of care, they will not have the desired effect of providing actionable information for health care consumers," said Mayo spokesman Bryan Anderson.

One pattern that emerged in Wednesday's report is that low cost can mean low quality. Among seven clinics listed with lower than average costs, Synergy and two others also had lower than average scores for diabetes care last year. Three had average diabetes scores.

The cost-quality relationship isn't absolute, though. Sawtooth Mountain Clinic in Grand Marais had higher than average costs of $598 per patient, for example, but kept only 39 percent of diabetic patients at optimal health compared with the state average of 46 percent.

Catalyst's Dr. Scott Jensen said his clinic doesn't have high-tech record keeping — patients take pictures of important paper records such as immunization histories — but all patients have his mobile number.

Some call with their health concerns, and Jensen and his colleague give them advice that keeps them from costly ER or hospital trips. Other patients are trying to quit smoking and need support amid temptation.

"We talk honestly about things but we try not to preach at them," Jensen said. "My lifestyle is not lily white. I've gone off some ski jumps I should never have done."

Among cost drivers, the figures show that pharmaceutical costs increased the most in 2015 — up 9.3 percent over total drug spending in 2014 — while inpatient hospital costs stayed the same.

Chase said clinic costs have suffered from drug company markups — such as Mylan's recent fivefold increase in cost for the EpiPen emergency allergy shots.

"They have some ability, probably more than others in the health care system, to work with patients around what their options are," Chase said. "Yeah, it's hard to manage [patients'] drug costs on your own, but some clinic groups are obviously doing better at it than others."