Saturday, September 27, 2008

Pay for the best care, save money

Cary Grant is supposed to have said it's cheaper in the long run to buy the best shoes possible -- they will hold up better, last longer, look better over time than the supposedly less expensive alternative. It turns out that health care may work the same way. Here are the opening paragraphs of a Bloomberg News story posted yesterday (and brought to my attention by a student in my health law class):

Ken Ferguson, 54, maintains the bulldozers and heavy trucks that haul coal at the Belle Ayr mine near Gillette, Wyoming. In return, his employer, Foundation Coal Holdings Inc., provides his family with the best medical care it can buy.

Ferguson's wife, Shanna, had her colon removed last year because of chronic inflammatory disease. Foundation sent her 700 miles away to the top-ranked Mayo Clinic in Rochester, Minnesota. The company covered the $85,000 bill for the operation and follow-up reconstructive surgery and even paid for Ken's motel.

"I was at the best place with the best doctors possible,'' said Shanna, 50. "And we saved money.''

So did Foundation. The coal producer says it has found an unconventional way to cut health costs: Seek out the nation's best care and give workers incentives to use it. About two-thirds of operations have proven to be cheaper at better-rated hospitals out of state. Even when the price was higher, the Linthicum Heights, Maryland-based company saved money by reducing misdiagnoses, complications and repeat procedures.

Health-care costs for an average employee at Foundation's two Wyoming mines have dropped about 5 percent a year since the program took full effect in 2005, while U.S. spending rose about 7 percent annually. As Foundation's Wyoming workforce grew, its total medical bills remained steady at about $5.5 million a year.

posted by Tom Mayo, 2:41 PM | link

Health care law (including public health law, medical ethics, and life sciences), with digressions into constitutional law, poetry, and other things that matter