The sun may set on Pennsylvania's Health Care Cost Containment Council

Business & Health, Dec, 1991 by Eric Zicklin

Times are so hard in Pennsylvania, the state may decide it can no longer afford to save money. Mired in its worst fiscal crisis in memory, the legislature is currently raising the guillotine over the Health Care Cost Containment Council, an independent agency funded by the state government.

The HC4, as the council is known in Pennsylvania, was created in 1986 to collect and distribute data on the quality and cost of health care. Prevailing logic was that if health care consumers were better informed they would make wiser purchasing decisions. Similarly, if cost and quality data were available to providers, they would improve both to attract buyers.

Five years later, a chorus of critics contend that the numbers are unreliable, the conclusions are misleading, and the savings negligible. These refrains will be heard at the state capitol in January when the Sunset Review Program, a mandatory assessment built into the council's funding, begins. A final vote is scheduled for September.

Most vocal (and powerful) of the council's detractors is State Senator Richard tilghman (R-17th District), chairman of the appropriations committee. "I don't think anyone has saved a nickel from this council," Tilghman says. "It claims that its reports teach people where to get cheaper care. I say bunk! I'd like to find one company that has changed its purchasing patterns based on the council's data."

So far, there are none. Council proponents, however, point out that 60 insurers, research groups, and hospitals have already purchased HC4 data. In addition, Hershey Foods Corp. plans to use the data to build a preferred provider network in 1993. "We know that all hospitals are not equal," says Hershey Benefits Director Richard Dreyfus, "but the council's data tell us precisely how each hospital ranks on quality and cost."

HC4 Chairman Richard Ross acknowledges the impatience of some legislators, but points out that "people on the front lines of this issue understand that the problem is not the cost of the council [budgeted at $1.6 million in 1991], but the rising cost of health care."

Since its inception, HC4 has focused solely on the state's 24 hospitals, publishing annual Hospital Effectiveness Reports and Small Area Analyses. The reports compare hospitals on the cost and outcomes of 57 medical conditions and surgical procedures. Software from MediQual Systems in Westborough, Mass., allows for the consideration of certain variables--each patient's age, medical history, severity of illness, and other factors--to make comparisons among providers. (See B&H, "Data management: Winning the numbers game," November, p. 27).

The public now knows, for example, that Philadelphia's Presbyterian Hospital charges only $40,928 for the same heart bypass surgery that Graduate Hospital, located across town, bills at $86,053. Even more telling, the number of deaths after the procedure at Graduate (5 of 147 patients) exceeded the total predicted by the software, while fewer deaths were reported at Presbyterian (4 of 232 patients) than the software anticipated.

The council's Small Area Analyses examine the services at each hospital for 158 admission categories. From these studies the Lackawanna County Hospital learned that it conducts breast procedures at a frequency 203% above the state's average. The proper response of either the hospital or its users to such as disclosure is unclear. "It's our mission to present the data without making judgments," says Jos Martin, council communications director. "It's up to the community to react."

The Pennsylvania Medical Society claims that extenuating circumstances, such as a hospital's location or its percentage of Medicaid patients, skew the council's data and might lead the public to erroneous conclusions. "Our facility may have a higher mortality rate than another," says Society President Robert Moyers, M.D., "but that may be because that facility is seeing sicker patients."

HC4 stands by its ability to account for such factors. Martin says, "When the medical community looks good, it's proud. When it looks bad, our methodology is flawed."