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BY MARION RENAULT

mrenault@postbulletin.com
Rochester’s Mayo Clinic
charges less for common
medical procedures than its
national competitors, a new
database shows.
When compared with the
other 17 hospitals also named
the country’s best by U.S.
News & World Report earlier
this week, Mayo Clinic’s fees
are frequently below average.
For instance, Saint Marys
Hospital in Rochester charges
$145,203, compared with
$596,878 at Los Angeles’
Cedars-Sinai Medical Cen-
ter, for one of the country’s
most expensive procedures:
respiratory diagnosis with
four-day ventilator support.
And Saint Marys’ price
is only the 12th highest for
that procedure among the 18
honor roll hospitals.
The differences in prices
are at times jarring.
Saint Marys charges
$26,428 and $31,529, respec-
tively, for pneumonia treat-
ment and cardiac pacemaker
implants, while its most ex-
pensive national competitors
charge $125,000 and $196,000.
“From an overall cost
standpoint, we’re happy the
Mayo Clinic looks favorable,”
said Dr. Frank Nichols, a
thoracic surgeon by training
who now serves as medi-
cal director of the Office of
Revenue Cycle Operations
at Mayo Clinic. “I think it’s
important information.”
But Mayo’s two Rochester
hospitals — Saint Marys and
Methodist — are relatively
costly for Minnesota, which
tends to have lower charges
compared with the rest of the
country. And even within the
Mayo Clinic Health System
itself, prices vary wildly from
location to location.
The Medicare Provider
Charge Data, released earlier
this year by the Centers for
Medicare & Medicaid Servic-
es, includes sticker prices of
100 of the most common inpa-
tient procedures across more
than 3,300 hospitals in 2011.
In some cases, listed prices
were 20 times what Medicare
typically reimburses.
Still, experts say six-digit
gaps in prices for identical
procedures are often difficult
to account for.
“Our purpose for posting
this information is to shine
a much stronger light on
these practices,” Jonathon
Blum, director of the Center
for Medicare, told reporters
in May. “What drives some
hospitals to have significantly
higher charges than their
geographic peers? I don’t
think anyone here has come
up with a good economic
argument.”
Decades of experience in
health-care policy haven’t
helped Minnesota-based
health-care research con-
sultant Allen Baumgarten
explain the wide disparities.
“It’s all kind of a mystery
to me,” he said.
But experts like Baumgar-
ten say these sticker prices
don’t affect
patients who
have either
private
insurance
or are
covered by
Medicare,
as insur-
ers and
Medicare
negoti-
ate better
prices.
In fact,
even the uninsured don’t
necessarily pay those sticker
prices, he said.
A fair number actually
have relatively high incomes,
Baumgarten said, from
working for start up busi-
ness, being self-employed or
having substantial invest-
ments. These “self-insured”
often negotiate with hospital
administrators and bargain
their way to lower bills.
Hospitals and communities
also have programs aimed at
aiding those who simply can’t
afford the sky-high sticker
prices.
“Only very few people pay
those prices,” Baumgarten
said. “Anybody with private
or public insurance is not
paying that price.”
Emerging Inconsistencies
Among the 50 Minnesota
clinics included in the data,
Mayo Clinic’s Rochester
hospitals crack the top 10 for
many expensive procedures
— a reflection of the kind of
patients that the world-class
clinic attracts, said Nichols.
“Patients in Rochester
tend to be sicker,” he said.
And their bills are still
often $50,000 to $100,000 less
than the state’s priciest.
University of Minnesota
Medical Center, Fairview
boasts the state’s costliest
procedure, a $242,738 treat-
ment for septicemia — an
illness caused by bacteria in
the blood.
Compare that to a $120,245
price tag at Saint Marys
Hospital for the same proce-
dure.
Understanding incon-
sistent prices across clin-
ics and regions becomes
difficult when each hospital
sets its prices in its own
ways. Some refer to decades-
old “chargemasters”, whose
unchanging prices are often
well above above market-
rate.
At the clinic,
Nichols said
there’s a
very formal,
deliberate
and detail-ori-
ented process
to determine
these sticker
prices.
Yearly, a fee
committee
comprised of
administrators,
physicians, social service
providers and Medicare
workers compares prices ,
“almost line-item-by-line-
item,” to market rates and
decides what Mayo will
charge.
“It’s not just an adminis-
trator sitting someplace who
says we need to make this
much money,” Baumgar-
ten said. “I’ve been on the
fee committee for over ten
years, and I’ve seen as many
things go down over time as
I’ve seen them go up.”
“It’s probably not com-
monplace to do the in-depth
review we do,” said Craig
Collins, division chair of
the Office of Revenue Cycle
Operations at Mayo Clinic.
Variation within
Mayo, Rochester
Nichols said regional
and structural differences
can also account for the
wide-sliding price ranges
revealed in the data, but ad-
mitted, “even within Mayo
Clinic there are some incon-
sistencies,” due, in part, to
the difficulty of integrating
such a “huge, multi-state
institution.”
It’s common for prices to
double across Mayo Clinic
Health System’s Minne-
sota locations; Saint Marys
charges $58,409 for the same
spinal fusion for which
Mayo’s Mankato Clinic
charges $26,133.
Even within Rochester
city limits, disparities ex-
ist.
For major small and large
bowel procedures, the Roch-
ester Methodist Hospital’s
price is listed at $88,492. A
mile away at Saint Mary’s,
the same procedure costs
$114,584 — a $26,000 differ-
ence.
Nichols attributed these
differences to the specializa-
tion at each hospital, which
he said drives their prices
up or down.
“Our nontrauma orthope-
dic work is done only at the
Methodist hospital — (for)
anything orthopedic-wise,
trauma is done
‘It’s not comparing
apples to apples’
Interestingly, the high
or low sticker prices don’t
necessarily correlate with
quality of care, Baumgarten
said.
“I don’t think it’s compar-
ing to apples to apples,” said
Nichols.
Instead, benchmarks
like readmission rates for
patients after they receive
treatment are better indi-
cators of the quality of a
hospital’s care.
In that arena, Mayo Clinic
is about average. In 2012, the
national average readmis-
sion rate was 18.4 percent,
according to a Centers for
Medicare & Medicaid Servic-
es report. At the end of last
year, the Mayo Clinic Health
System was 14.1 percent, and
Saint Marys and Method-
ist Hospitals were both 18.3
percent.
Mayo Clinic was ranked
third in the country for
overall quality by U.S. News
& World Report.
The state’s health-care
costs are difficult to char-
acterize, said Baumgarten,
because although average
state Medicare payments are
low, Minnesota employers
often pay high premiums.
Many hospitals, said
Baumgarten, will point to
the discounted Medicare pay-
ments and say they have no
choice but to drive up prices
to private insurers in order
to make up for that shortfall.
But Baumgarten said he
remains unconvinced that
Medicare is truly underpay-
ing hospitals.
“If you go to Florida you
have all these hospitals
marketing to seniors to
‘bring your Medicare pay-
ments to our hospitals,’” he
said. “These hospitals have
figured out a way to deliver
care and make money based
on what they collect from
Medicare patients.”
According to Baumgarten,
because hospitals anticipate
that insurance companies
and Medicare won’t pay the
full sticker prices, they tend
to inflate them.
“They set the price know-
ing that no one will want to
pay (it),” he said, “so in some
sense it’s what (they) think
the market will bear.”
B4 SATURDAY, JULY 20, 2013 1045#6--&5*/tXXX1PTU#VMMFUJODPN
Mayo a bargain compared to national competitors
UCSF Medical Center
San Francisco
$414,556
Mayo Clinic-
Saint Marys Hospital
Rochester
$145,203
Barnes Jewish Hospital
St. Louis
$132,125
Northwestern
Memorial Hospital
Chicago
$239,249
Cedars-Sinai Medical Center
Los Angeles
$596,878
Ronald Reagan
UCLA Medical Center
Los Angeles
$197,706
Cleveland Clinic
Cleveland
$195,267
Brigham and
Women’s Hospital
Boston
$201,584
Massachusetts
General Hospital
Boston
$147,696
NYU Hospitals Center
New York
$251,099
New York-
Presbyterian Hospital
New York
$196,163
Hospital of University
of Pennsylvania
Philadelphia
$309,655
Thomas Jeerson
University Hospital
Philadelphia
$207,906
University Hospitals
of Cleveland
Cleveland
$114,287
The Johns
Hopkins
Hospital
Baltimore
$81,182
Duke University
Hospital
Durham
$136,410
Indiana University Health
Indianapolis
$116,352
Comparing the country’s best 18 hospitals
Charges for respiratory system diagnosis with ventilator support, more than 96 hours, for the 18 hospitals on
the U.S. News and World Report’s Honor Roll.
Barb Erickson / berickson@postbulletin.com Source: Medicare Provider Charge Data
Grand Itasca Clinic
and Hospital
Grand Rapids
$45,571
Park Nicollet
Methodist Hospital
Saint Louis Park
$49,574
University of Minnesota
Medical Center, Fairview
Minneapolis
$193,498
Unity Hospital
Fridley
$152,191
North Memorial
Medical Center
Robbinsdale
$148,451
Abbott Northwestern
Hospital
Minneapolis
$146,015
Regions Hospital
Saint Paul
$142,132
St Lukes Hospital
Duluth
$57,466
Ridgeview
Medical Center
Waconia
$71,882
Fairview
Southdale Hospital
Edina
$84,591
Mayo Clinic -
Saint Marys Hospital
Rochester
$114,584
How Minnesota hospitals stack up
Barb Erickson / berickson@postbulletin.com Source: Medicare Provider Charge Data
TOP FIVE BOTTOM FIVE
Mayo Clinic - Rochester
Methodist Hospital
Rochester
$88,492
Charges for major small and large bowel
procedure for the ve most expensive and ve
least expensive hospitals in Minnesota.
In Minnesota, it’s
relatively expensive
From an overall
cost standpoint, we’re
happy the Mayo Clinic looks
favorable.”
—Dr. Frank Nichols,
a thoracic surgeon
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TUESDAY, NOVEMBER 2, 2010
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Four sections 650¢
ELECTION 2010
BLOOMING PRAIRIE
ROCHESTER CITY COUNCIL
WHAT’S THE LATEST?
Less than a
month after
a trade to reacquire Randy Moss,
Vikings coach
Brad Childress
jettisoned the wide receiver after
only four games. D1
Juliet Ault, LeRoy
Dorothy Bailey, Chatfield
Alice Buske, Coleraine
Joseph Day, Rochester
Sharon Heinen, Rochester
Keith McDonald, Brownsdale
Marian Row, Rochester
OBITUARIES
Page B2
FACTOID
The Palace of the Gover-
nors in Santa Fe, N.M., is the
oldest continuously occupied
public building in the United
States. It was built in 1610.
ANSWER MAN
SPORTS
How many DUI convictions
does a person have to get
before the state issues
“whiskey plates”? The
Answer Man reports. A2
UPDATE | Residents in areas
hit hard by the September
flooding are frustrated by a
lack of answers. B3
INSIDE
Wednesday 52° | 34°
7 a.m. 38°
1 p.m.
50°
7 p.m.
43°
WEATHER
Full forecast B6
50+
LOCAL STORIES
61+
ADVERTISERS
HEARD ON
THE STREET
The management firm for
a new student housing
complex downtown Rochester
has a local connection. A2
Moss
AT LAST, ELECTION DAY
By Heather J. Carlson
hcarlson@postbulletin.com
Voters head to the polls today as a
furious and lengthy campaign season
comes to a close.
On the ballot for southeastern Minne-
sota voters are choices for Congress,
governor, legislators, mayors, sheriffs
and a host of school funding questions.
And while thousands were expected
to cast ballots across Minnesota today,
many already have registered their
votes. It appears more absentee ballots
will be cast in Olmsted County this elec-
tion than during the last midterm elec-
tion in 2006.
Olmsted County Elections Adminis-
trator Pam Fuller said more than 3,500
ballots had been counted as of Monday.
And with a steady line of people waiting
to vote absentee, she expected plenty
more absentee ballots to come in to push
past the 4,000 who voted early in 2006.
“I would say we are going to have at
least another 1,000 ballots,” she said.
This year also marks the first time
that county offices are responsible for
counting absentee ballots. In the past,
that was left up to the election judges
at the local polling places. The count-
ing is already under way, with election
workers working Saturday and Sunday
to tabulate all the absentee ballots
received as of 5 p.m. Friday. Once the
polls close at 8 p.m. today, county work-
ers’ first priorities will be to make sure
no one who voted absentee casts a ballot
on Election Day, as well as beginning to
add up the final tallies.
Marcia Ferguson of Rochester was
among those at the city-county Govern-
ment Center to cast an absentee ballot.
She said she did not have to wait very
long, and she always makes an effort
to vote. “I believe it is a great privilege,” she
said.
Polls open until 8 p.m.; strong absentee ballot turnout in Olmsted County
Jerry Olson / jolson@postbulletin.
Katarina Garry, center, was among the first voters at Shorewood Senior Campus in Rochester at 7 a
today. “I’m definitely American-minded and wouldn’t miss a vote,” she said. “It’s a great day.”
Today is Election Day
Today: Questions about voting? See
Page B3.
Later, check in with Postbulletin.com
for updates from polling places and as
returns begin rolling in. If you follow
Twitter, look for Post-Bulletin updates
with the hashtag #pbvote.
Wednesday: Who is Minnesota’s
new governor? How did the votes
for Olmsted County sheriff, Rochester
School Board and the school’s levy
request turn out? P-B reporters will
have the full story. Plus, find a full
rundown of the national outcomes.
What’s your prediction for the election results? Click on the Backtalk survey at Postbulletin.com.
Cars take a wild ride
Vehicles stolen from
lot are found on ship
bound for Africa
By John Weiss
weiss@postbulletin.com
BLOOMING PRAIRIE — A
2009 Chrysler Sebring and a 2005
Toyota Corolla returned Monday
to the lot at Koster Car Korner —
after they were found on a ship
headed to western Africa.
Reeves Koster, chief operating
officer of the dealership, never
thought he’d see the cars again
after they were stolen about five
months ago in an online scam. He
had written off the $20,000 loss.
But a few weeks ago, the cars
were found in the ship headed
to Ghana, where stolen cars are
frequently shipped and auctioned
off, according to news accounts.
The vehicles from Blooming
Prairie were found in a random
f container on a ship h ld take
AFRICA
Ghana
Rick Dahl / rdahl@postbulletin.com
Split council vote
OKs tree ordinan
“They figured they
could take advantage
of a small-town
dealership.”
— Reeves Koster
Developers say measure
will add to housing costs
By Jeffrey Pieters
jpieters@postbulletin.com
An ordinance requiring streetside
trees to be added in new Roches-
ter developments won city council
approval on a 4-3 vote.
The vote on Monday ended a six-year
process of developing the ordinance,
which is intended to help the city avoid
adding to a “tree deficit” that currently
amounts to about 27,000 potential plant-
ing areas that are vacant.
City builders opposed the ordinance,
on grounds that it will add to housing
costs and limit consumer choice.
Proponents extolled the health and
environmental benefits of having more
trees, and said that trees’ shade over
houses and pavement helps minimize
the “heat island” effect commonly
found in urban areas.
Thi is about the best interests of b ut trees
Rochester had several
years before constructio
current slow pace.
“We have lost ground
flug said. “And now
Emerald Ash Borer is
i g ”
New tree
requirements
LDevelopers, as a condit
development approval, mu
agreement with the city o
their planting plans.
LNew trees would have
be planted within two ye
receiving building permit
five years of developmen
LTrees must be spaced
apart —that’s based on
canopy size of an averag
tree.
Always online » www.postbulletin.com » ww p
ELECTION 2010
Wednesday 52° | 34°
7 a.m. 38°
1 p.m.
50°
7 p.m.
43°
WEATHER
AT LAST, ELECTION DAY
Polls open until 8 p.m.; strong absentee ballot turnout in Olmsted County
n@postbulletin.
ester at 7 a
day.”
om.
e
n
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