July: Message from the President – Stephen B. McPherson | Healthcare to Homecare to Senior Living

June 27, 2013

McPherson 2013

On June 2, The New York Times ran a front-page story on the high cost of medical procedures in the U.S. The story focused on routine colonoscopies – a colon cancer screening recommended for anyone over 50.

The article pointed out the disparity in costs for the procedure depending on where it was performed. As you may know, insurance companies – including Medicare and Medicaid – negotiate pricing with providers. At Masonicare, our employee health plan is administered by Aetna. Any member of the plan can go on the Aetna member web site and find out how much procedures or surgeries will cost at different providers. I think this is a great tool. I learned that if an employee in our health plan has a colonoscopy at Masonicare Health Center (where Connecticut GI performs procedures), the cost is $1,870. Were the employee to go to local hospitals, the cost would jump, ranging from $3,210 to $3,759. You get the picture. 

Where consumers choose to have this or any other procedure done ultimately affects their employer's cost to provide benefits. I believe a company's budget is a visible statement of its value system. Our goal at Masonicare is to provide benefits following an 80-20 formula, that is, we pick up 80% and the employee pays in about 20%. This year alone, Masonicare's direct medical and dental expenditure will exceed $15 million. As we develop our budget for 2014 (the fiscal year will actually begin October 1), we are encouraging our employees to be informed consumers by comparing cost and quality so they can choose a lower cost option without compromising quality.

If you would like to see the entire New York Times piece, it's online at http://nyti.ms/15K7kzq. The article contains some startling information–e.g. the average hip replacement in the U.S. costs over $40,000; in Spain, it's less than $8,000. The average angiogram in the U.S. is about $1,000; in Canada, it's $36. At this rate, "medical tourism" may be more than just a trend.

The Affordable Care Act was intended to make healthcare more consumer-focused. We as consumers need to do our part to be educated and informed.

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