Why Some Hospitals Dispute Boston's "High Health Care Costs" Label

Major teaching and research hospitals in Massachusetts are worried about two elements in the national health reform debate. One...how the federal government will continue funding for medical education. Two...the suggestion that higher Medicare payments to hospitals with higher health care costs (such as Massachusetts) aren't justified.

Those who favor reducing Medicare payments to help reign in health care spending routinely cite this research from the Dartmouth Atlas Project. The Massachusetts Hospital Association says the Darthmouth analysis ignores "underlying demographic and cost-of-living" differences and does not recognize "added costs of educating the next generation of physicians." The Massachusetts delegation relayed these concerns to the House chair of Energy and Commerce in this letter.

Amid the talk about high health care costs in Massachusetts, this chart is interesting:

This is from the state's Division of Health Care Finance and Policy (DHCFP). It's based on data from the Centers for Medicare and Medicaid Services (Office of the Actuary, National Health Statistics Group, 2007). The $63 billion estimate for health care spending this year is 16.3% of the state's GDP (based on the predicted national GDP growth rate from Bureau of Economic Analysis, US Department of Commerce, also calculated by the DHCFP). Health Care spending is expected to be nearly 18% of the national GDP this year.

Martha Bebinger