Health Care

Data dig: Spending at hospitals among highest in nation

New data released by federal regulators show that Vermont residents spend more than their national or regional counterparts on hospital care.

In 2014, the most recent year for which data are available, Vermont ranked third in the nation and first in New England for per-capita spending in hospitals.

From 2000 to 2014, Vermonters’ per-capita spending in hospitals roughly tripled from $1,570 to $4,670, and per-capita spending on overall personal health care more than doubled from $4,342 to $10,190.

Without adjusting for population, the growth rates are nearly the same: Vermonters’ spending in hospitals also tripled from $957 million in 2000 to $2.9 billion in 2014, and spending on all personal health care devices and services more than doubled from $2.6 billion in 2000 to $6.4 billion in 2014.

The data, originally published by the Kaiser Family Foundation, come from the U.S. Centers for Medicare and Medicaid Services, which releases data every five years on health care spending in different states.

The CMS methodology takes spending in Vermont hospitals — by residents of any state — and uses a mechanism to convert that to Vermont resident spending in all hospitals in any state. For that reason, the data are different from what regulators at the Green Mountain Care Board report every year.

“We here at the Green Mountain Care Board have been taking a look at that Kaiser Family report and we haven’t had enough time to digest it fully, but its, certainly, initial blush doesn’t look good,” said Kevin Mullin, the chair of the board.

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Mullin said the board staff would look at different factors that could drive the data — including Vermont’s older population, rural nature, and high rate of people with insurance.

“We have really low numbers of uninsured, but if you take a look at Massachusetts, they’re doing just as well as us,” and its uninsured rate is lower, Mullin said. He said Massachusetts may benefit from having a major city.

“We’ve got to do a much deeper dive and try to get it all figured out before we can really say that we’re spending too much on hospital care in Vermont,” Mullin said. “We’ve known for years that hospitals have been the biggest drivers of health care costs in the state.”

“The Green Mountain Care Board since its inception has been successful at trying to curtail some of the growth, but obviously there’s always room to do more,” he said.

Jeff Tieman

Jeff Tieman is president and CEO of the Vermont Association of Hospitals and Health Systems. File photo by Erin Mansfield/VTDigger

Jeff Tieman, the CEO of the Vermont Association of Hospitals and Health Systems, referenced a report from the Commonwealth Fund ranking Vermont first in the nation for the quality of its health care system.

Tieman said that while he has not looked deeply into the new data, there is “really good work that hospitals are doing to reduce costs, to add value, and to build a system that really truly puts the patient at the center of the care delivery team.”

“I can tell you that being a rural state is part of what contributes to cost,” Tieman said. “We’re in the same company as North Dakota, South Dakota, West Virginia, Wyoming, other states that have large rural populations.”

He also said people living in rural areas are “more likely to engage in risky health behaviors and experience higher rates of chronic conditions and even activity limitations that can all lead to hospitalization.”

Tieman also pointed to the state’s aging population, who tend to have greater health needs, and high proportion of people using Medicaid, “which means that our population skews toward a population with great need.”

He said his board, which includes all hospital CEOs in the state, is “really focused on how do we deliver the best possible care at the lowest possible cost. That’s what the CEOs are interested in.”

“We can slice and dice data in various ways, but I assure you the effort here is on delivering better, more-effective care at the lowest possible cost, and we’re always driving towards that,” Tieman said.

Michael Carrese, the spokesperson for the University of Vermont Medical Center in Burlington, the largest hospital in the state, said the information in the CMS data appears to be different from other reports he’s read showing Vermont has lower health care costs for Medicare patients.

He pointed to a report from the Green Mountain Care Board showing that the Burlington area is not the most expensive area in the state to get care. “I think that’s a fair indication that we’ve been working pretty hard on the cost issue,” he said.

Carrese said the hospital is constantly working on making health care more affordable. In its upcoming budget, Carrese said the hospital plans to ask for a less than 1 percent increase in how much it charges insurance companies. The price increases the hospital has asked for in previous years were already historically low, he said.

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“We really support transparency on cost,” Carrese said. “We’ve asked, in fact, for more analysis on cost in Vermont to be done because we want to have as much information as possible. Bring it on in terms of cost.”

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Erin Mansfield

About Erin

Erin Mansfield covers health care and business for VTDigger. From 2013 to 2015, she wrote for the Rutland Herald and Times Argus. Erin holds a B.A. in Economics and Spanish from the State University of New York at Stony Brook, where she also attended journalism school. Erin has worked in public and private schools across Vermont and interned in the U.S. Senate. She has been published by the Columbia Journalism Review and the Society of Professional Journalists. She grew up in Killington.

Email: [email protected]

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