The Plain Community and price transperancy.

The recent lead articles "Is Health Care Ready for a Full Menu of Prices?" and "Doctors Say Future of Price Transparency Appears Cloudy" in the January-February 2008 issue of The Physician Executive are commendable.

I compliment the input of Mark Legnini of the Healthcare Decisions Group for his definition of price transparency as "the provision of usable financial information to a specific audience."

Readers should know that a specific audience from Lancaster County, Pa.--The Plain Community--has benefited from usable financial information by physicians. Heart of Lancaster Regional Medical Center (HOLRMC) hospital administrators and Health Management Associates, Inc. (HMA) corporate executives.

Price transparency is working well in Lancaster County.

When HOLRMC opened in August 2004, a contingent of Amish and Mennonite elders welcomed the hospital administrators and staff physicians. This group of men represented a large community within Lancaster County.

The Plain Community, as they are known, inhabited Lancaster County since the early 1700s at the behest of William Penn, the "Absolute Proprietor" of the Province of Pennsylvania and author of the Frame of Government, Pennsylvania's first constitution.

With the Plain Community elders' interest in the new hospital, both hospital administrators and surgeons were very pleased to meet this group. This delegation of Amish and Mennonite Elders came to the HMA-owned hospital to describe their approach to Plain Community health care and their unique economic stance.

Collectively, the Plain Community spends approximately five million dollars--all in cash--per fiscal year for health care. And the elders were interested in securing a discount with the hospital administrators and surgeons over their rates.

The Plain Community, like the uninsured, were billed a hospital's full retail price for their care. The elders took the position that unlike many of the uninsured patients that the hospital cared for, the Plain Community was proud to pay for the health care services rendered.

Historically, the Amish and Mennonite population chose to forego such staples as electricity, modern transportation and even health care insurance as part of their collective rejection of the secular world. The Plain Community objects to medical technology that it believes challenges God's plan, such as organ transplants, but does not reject other medical technology.

The Plain Community also does not believe in medicolegal litigation as their belief in health care outcomes is entirely "in God's hands." The elders approached the hospital administrator and surgeons with the viewpoint of feeling overcharged by other Lancaster County hospitals. The Elders believed that their population would be served well by HOLRMC with its strong community ties and its experience of obtaining discounted surgical pricing for treatment in remote locations, including Mexico.

The elders recounted experiences where several of their population would travel to Mexico for general and orthopedic care where they paid cash for surgical procedures at reduced rates.

The elders sought price discounts in such surgical specialties. HOLRMC, a for-profit hospital, agreed to discounts of up to 40 percent off its rates with resultant prices slightly higher than Medicare reimbursements, the level most hospitals consider a minimum. The elders were not satisfied with this initial discounted offering.

The HOLRMC principals responded that if prices were dropped to levels below Medicare reimbursements, it could be charged for fraud for charging Medicare patients more. The Elders agreed to pay "one price from admission to discharge" for such surgeries as a total hip replacement in the sum of $16,578, $3,200 for knee arthroscopy, and $7,542 for a mastectomy.

The elders and hospital principals emphasized that the "one price" was a sum total. The negotiated price would include the hospital stay, surgery, anesthesia, medication, testing and medical supplies. To qualify for these discounts, the Plain Community patient would be required to pay 50 percent of the sum price upon admission to the hospital.

The Plain Community's rates are still greater than what a Medicare patient might expect to be billed, but also approximately half the full retail rate of other uninsured patients.

Prior to this groundbreaking negotiation, the Plain Community had pooled resources to pay for medical resources to pay for medical care. But as the cost of a modern day hospital stay had skyrocketed, cost-sharing had often fallen short. This price negotiation was scrutinized by HMA, the corporate owners. However with the potential for nearly 100,000 customers exclusively selecting HOLRMC for their surgical needs, approval was provided by HMA Corporate principals, most notably CEO Joseph V. Vumbacco.

The negotiated pricing between the Plain Community and HOLRMC was lauded with a front page article in the Wall Street Journal. The article's author praised the willingness of all parties to come together in reaching a common goal--the best available pricing for the best quality care for the Plain Community.

The HOLRMC surgical pricing continues to flourish among the Plain Community of Lancaster County. In fact, there have been several admissions of relatives of the Lancaster County Plain Community from other states who have traveled to Lancaster County for their top-quality, discounted care.

Currently, members of the Plain Community live in 23 states and in one Canadian province. There may be a day where the more distant Plain Community members from even farther away come to Lancaster County for their surgical needs.

Sincerely,

Tony Mauriello MD, MBA, FAAOS 

Board Certified Orthopaedic Surgeon Lancaster, Pennsylvania