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Phoebe frowns on CON change

• Citing new data, an Albany hospital chief asserts that too many services may drive up health care costs.

Barbara Rivera Holmes

ALBANY — Phoebe Putney Memorial Hospital officials challenged data presented by some industry officials that contend Phoebe’s health care costs are too high and who argue that competition would reduce prices.

Hospital CEO Joel Wernick on Wednesday cited data to the opposite, and added that he was disappointed in the General Assembly for passing legislation that redefines some Certificate of Need requirements. Gov. Sonny Perdue signed that bill into law on Thursday.

“I think it (competition) has the potential to drive up (health care) costs,” Wernick said.

On Tuesday, Vince Falcione, director of external relations for the Procter & Gamble Paper Product Co. in Albany., said health care costs in Albany are one of two factors that are preventing the plant from being as competitive as it could be, and said that opening up the health care market would drive costs down.

Falcione’s comparison data from 2006 for P&G’s U.S. sites showed that, with 100 percent being the average, health care costs for employees at the Albany plant are 136 percent and at the Augusta plant, 84 percent.

During an 11:45 a.m. hospital board of directors meeting, Wernick referenced data from an independent study that shows Albany is the seventh cheapest in a “comparison of HCG (health care guidelines) area factors regions where Procter & Gamble has plant locations,” data material states.

Relative to Albany, the six cheaper places according to the Milliman Inc. study are Green Bay, Wisc.; North Sioux, S.D.; Lima and Leipsic, Ohio; Russellville, Ark; and Maine.

“With the sophistication (of care at Phoebe), it’s one heck of a bargain. You won’t find a Mayo Clinic MRI at Russellville,” said Wernick, an Arkansas native, in a reference to Phoebe’s recently unveiled magnetic resonance imagining machine, the same one used at the Mayo’s Jacksonville, Fla., campus.

Milliman Inc.’s December 2007 study was conducted with taxpayer dollars for the the city of Albany, Dougherty county and the Albany-Dougherty Economic Development Commission.

Unlike Falcione, Wernick said he thinks too many choices may boost prices.

The executive provided board members and administrators with an April 7 Wall Street Journal article whose headline reads, “More Choices Drive Cost of Health Care.”

The article cites data from a Medicare report released Monday by the Dartmouth (College) Atlas of Health Care.

According to study co-author Elliott Fischer, a Dartmouth medical professor and director of its Center for Healthcare Research and Reform, “Where more alternatives are available, costs tend to be higher — adding to the growing evidence that the supply of health care drives its use,” the article states.

Wernick said that health care economics aren’t like consumer-market economics, in which competition can yield reduced prices.

“The more supply you have (in medical economics), generally the higher the costs because people tend to fill up capacity with demand,” he said. “If you order a lot of things (such as tests) ... the actual things that you are ordering drives the cost, not the actual price of that service.”

He added, in another reference to the Mayo Clinic, “Who are you competing with? ... We are competing with places that people used to go to.”

Rather than Certificate of Need, Wernick said the state should instead have made headway on a trauma care network.

“The priority (should be) changing laws that will ultimately help the health status of the citizens of the state,” he said.

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