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TN ranks third for rising hospital costs, insurers' group says

10:16 AM, Mar 20, 2013   |    comments
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By Tom Wilemon | The Tennessean

The cost of a hospital stay in Tennessee rose at the third-highest rate in the nation between 2008 and 2010, according to a report by the trade organization that represents commercial health insurers.

Researchers at America's Health Insurance Plans determined that the average annual inpatient hospital cost rose 8.8 percent for Tennessee patients covered by commercial policies -- an increase exacerbated by hikes in the greater Nashville metropolitan statistical area, which includes Murfreesboro and Franklin. Hospital costs soared 10.6 percent locally -- the ninth-highest increase of any metro area in the nation.

The report in the March issue of the American Journal of Managed Care designated New York as having the highest rate of hospital inflation at 10.5 percent, followed by Texas at 9.3 percent.

"To make health care coverage more affordable for consumers and employers, there needs to be a much greater focus on the underlying cost of medical care," said Karen Ignagni, president of America's Health Insurance Plans, which is both a trade association and a lobbying organization for large health insurers.

John Howser, a spokesman for Vanderbilt University Medical Center, questioned whether the organization really cared about patients' pocketbooks.

"Is this analysis about concerns over health care price escalation, or to advocate leeway for greater profitability for commercial payers within the health insurance industry?" Howser said.

Mike Schatzlein, CEO of Saint Thomas Health, which operates a network of area hospitals, says a number of issues are having an impact on prices.

"Our focus on making communities healthier with services delivered by MissionPoint Health Partners is beginning to address this with demonstrated savings of more than 12 percent in the first year of operations," Schatzlein said. "We agree with Karen Ignagni that there needs to be a greater focus on the underlying costs of medical care. Transaction-based payments and unfettered demand for services are the two biggest contributors."

Inpatient hospitalizations costs that grew at the fastest rate nationwide were spinal fusions, which rose 15.2 percent.

The study's authors used claims data for patients under 65 to compare costs.

Contact Tom Wilemon at or 615-726-5961 or follow him on Twitter @TomWilemon.

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