October 2020, Volume XXXIV, Number 7

Cover story two

What’s 20% Over the National Norm?

Health Care Costs in St. Cloud

ver the past several months, physicians and other healthcare providers, business representatives, and patients in Central Minnesota have gathered to promote patient-centered, transparent, personalized, cost-effective healthcare in our region. The community-based group, which has organized as “Central Minnesotans for Healthcare Independence” (CMHI), is dedicated to a strong health care infrastructure in Central Minnesota.

After several formal and informal discussions, the group concluded that there are many compelling reasons to take action and attempt to re-direct some troubling trends regarding the region’s health care infrastructure. Our region is not unique in struggling with these issues and our findings may be of interest to health care providers in other areas with similar demographics.  In order to promote continuous quality improvement and other innovation through competition –  which maintain and foster a strong, community-based health care infrastructure -- Minnesotans in St. Cloud and beyond should be able to choose their physician and have options for choosing the location of their care. This is important for many reasons, including:  privacy concerns, to assure continuity of care, and preserve trust between physician and patient to ensure quality care. Further, many patients are uncomfortable navigating a large health network and specifically seek out smaller clinics.

Rapidly expanding healthcare systems across the country are increasingly using their immense and expanding market power to limit healthcare choices. This is not in the best interests of communities over the long term.  An example of such a rapidly expanding system is that of CentraCare in Central Minnesota.  As a result of their expansion and consolidation of the local and regional market, our region is experiencing higher health care costs and the erosion of patient choice and access. Studies of such health care marketplace issues report that improvements in access/options are almost impossible to obtain once a critical mass of consolidation has occurred.  Hence, our efforts now to protect our community and the patients we serve.

The cost of healthcare in the St. Cloud market, for 2019, was 19.6% higher than the national average.

Because of CentraCare’s size and many contributions to the community, identifying solutions that are acceptable to all health care providers as well as to employers and policy makers has been challenging.

However, with the recent closure of the HealthPartners clinic in St. Cloud this fall, and the pending closing of Physicians Neck and Back Clinic at the end of 2020, the concerns have been heightened, not only by CMHI, but also by employers and public officials concerned about health care costs and the necessity to be focused on continuous excellence in all health care services provided.

The HealthPartners clinic in Sartell, which was closed by its parent company in Bloomington, provided a critical alternative option for primary care -- including prenatal care -- and was a clinic that received high marks in several quality surveys over the years, challenging other local physicians to compete with their exceptional standards.

Across America, studies have shown that consolidation of health care is contributing to costs in general. According to information shared earlier this year by the St. Cloud Area Chamber of Commerce, Central Minnesota is experiencing higher health care costs when compared to other areas. The Cost of Living Index compiled by The Council for Community and Economic Research shows that the cost of healthcare in the St. Cloud market, for 2019, was 19.6% higher than the national average. Comparatively, healthcare costs are just 5.5% above the national average in Minneapolis and 6.1% above the national average in St. Paul. (Report published February 2020 for calendar year 2019, comparative data for 266 cities).

According to the Chamber, “The index measures regional differences in the cost of consumer goods and services, excluding taxes and non-consumer expenditures, for professional and managerial households in the top income quintile. It is based on more than 50,000 prices covering almost 60 different items for which prices are collected three times a year by the St. Cloud Area Chamber of Commerce.  The composite  index is based  on six components - housing, utilities,  grocery items, transportation, health care and miscellaneous goods and services.”

Legislative and employer-funded research from across the nation indicate that health care costs increase as a geographic area’s health care services/providers consolidate. Consolidation, especially with the sale of the St. Cloud Medical Group a few years ago and now the closure of the HealthPartners Clinic, is one of the troubling trends which the CMHI providers believe needs to be addressed by the community. The group has looked at some of the laws enacted in other states in hopes of curbing the escalating sales of physician practices to large hospital systems.

In September of this year, the Rand Corporation released “Rand 3.0” which finds that consolidation is “a key contributor” to increased prices and price variability, recommending that “...employers can support efforts to promote competition in health care markets by opposing consolidation among existing providers and by promoting entry of new, lower-priced providers.”

Additionally, the experience of healthcare providers during the COVID-19 pandemic has reinforced our belief that independent, smaller, and more nimble providers are an important part of the healthcare system that must be protected. At a recent, virtual meeting of the St. Cloud Area Chamber, independent providers gave examples of their flexibility – due in large part to their smaller size – to adapt to the safety needs created by state mandates and patient concerns.

For example, the physicians at St. Cloud Orthopedics met daily during the beginning of the crisis to make decisions without delay for patients that needed care. While the situation was urgent for some individual patients, the urgency regarding the shortage of personal protective equipment (PPE) and the lack of definitive knowledge on how exactly the coronavirus was spreading, required decisive and timely action to respond to each patient’s situation.

Health care costs increase as a geographic area’s health care services/providers consolidate.

St. Cloud Surgical Center expanded its safety and cleaning protocols and then continued to adjust them, without delay, as more scientific information was made available. Because the physicians who use the Surgical Center offer a variety of services, it was critical that each procedure and each patient could receive customized care at truly a time of crisis.

Another example of highly valuable nimbleness by a small provider was Simplicity Health.  The primary care clinic was first in the community to provide electronic (telehealth) office visits and car visits to ill patients.  Simplicity Health clinic remained open during the entire pandemic closures during the Spring of 2020.

Because of CentraCare’s size and many contributions to the community, identifying solutions that are acceptable to all health care providers as well as to employers and policy makers has been challenging. Certainly, the community deserves a vibrant hospital system that can serve as a critical regional center for our surrounding towns.  However, innovation flourishes and quality is enhanced when patients have access to alternative healthcare choices and we believe that competition leads to greater effort.

As leaders of CMHI, we hope to initiate further discussion on several problematic trends which, if reversed in a collaborative manner, can lead to the vibrant, high quality health care delivery system which will benefit our community is so many ways.  The following are areas we have identified as needing improvement to help redirect the troubling trends we discussed earlier, both in Central Minnesota and nationwide;

Issues of concern:

  • Encouragement of patient choice and privacy - Example:  Ending the practice of financially penalizing employees and families for seeing independent practitioners
  • Implementation of a secure, electronic interface between providers - Example: allow for transfer of patient health records, images, and electronic orders to outside providers
  • Examination of a hospital’s practice of sending appointment requests to patients whose primary physician is established outside of a connected large  health care  system
  • Examination of electronic medical record design issues (i.e., “information blocking” and “white listing”) that provide a disincentive for large health care system providers to refer patients outside of their system
  • Providing information to patients when their current health care provider is being acquired/absorbed by the geographically dominant large health care system, with the result being a new facility fee or higher charges/copays
  • Public disclosure/transparency of large health care system referral volumes to itself vs. independent and/or non-related practitioners
  • Disclosure of cost/charge ratio on patient bills
  • Stronger adherence of the state’s transparency mandate to eliminate facility fees
  • Community reinvestment commensurate with the unpaid property taxes due to non-profit status
  • Disclosure of top-paid hospital employees’ compensation including benefits, fringe benefits, and expenses.  This requirement on health care providers has been mandated elsewhere, e.g., Connecticut, when legislators have become concerned and the higher health care costs accompanying consolidation of health care providers

Our goal is to ensure that employers and patients understand the detrimental and long-term effects of consolidation and become engaged in preserving our region’s health care resources.  We all have a goal to create better healthcare outcomes for everyone in our region. We believe our community will be best served when we achieve full and secure interoperability of health care records, as mandated by current legislation.

We have seen these issues unfold over the past several years and believe it is necessary to work together to improve this situation, especially given the extraordinary demands on healthcare providers during the COVID-19 pandemic. Those who are part of CMHI have shown courage and deep dedication to our community.

Central Minnesotans for Healthcare Independence will continue to have conversations with people in our region, with lawmakers, and with regulators in the best interest of our community. We look forward to having more people join in our effort.

Julie Anderson, M.D., is the founder of Simplicity Health, a family medicine clinic in St. Cloud.

Derik Weldon, M.D., is the Central Minnesota Medical Director for Center for Diagnostic Imaging. 


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Derik Weldon, M.D., is the Central Minnesota Medical Director for Center for Diagnostic Imaging.