Does NIH funding = higher prices at Massachusetts hospitals?

With $2.4 billion in NIH funding flowing into Massachusetts in 2010, Bay State researchers rank second in the race for federal research dollars. (California is first at $3.3 billion.) A large chunk of that — $760 million – goes to three Harvard teaching hospitals – Mass General, the Brigham and Beth Israel Deaconess.

A new state report on hospital prices offers no surprises when it shows that procedures at these hospitals cost far more than they do at community hospitals. The argument goes that patients are paying for access to cutting-edge cures from clinical researchers hand-picked to serve at Harvard teaching hospitals.

However, to the average consumer or state regulator, that argument doesn’t seem to explain why a c-section at Mt. Auburn Hospitals in Cambridge – also a Harvard teaching hospital – costs about $6,700, when the same operation costs $10,500 across the river at Mass General.Some of it can be explained by the bargaining power of Partners, the umbrella corporation that runs both MGH and the Brigham. The rest, well, those hospitals will have to explain that as the state moves toward accountable care organizations. With this next step in its much touted approach to health reform, these hospitals are bound to feel the squeeze.

With NIH funding already on the rewind, it seems clear that hospitals-based researchers are going to have to learn to do with less.

The table below shows the costs for three procedures at the state’s top NIH funded hospitals. It also lists costs at two hospitals with little NIH funding but high rankings from Consumer Reports. (Note that North ShoreMedical Center is a Partners hospital.)

Organization

# of Awards

2010 NIH Funding

Hip replacement

Pneumonia

C-section

Gall bladder removal

MASSACHUSETTS

GENERAL HOSPITAL

723

$331,770,965

$26,483

$9,225

$10,517

$12,670

BRIGHAM AND WOMEN’S

HOSPITAL

577

$302,335,077

$27,342

$8,664

$8,800

$11,678

BETH ISRAEL

DEACONESS MEDICAL CENTER

275

$133,203,547

$26,707

$7,998

$8,390

$10,375

BOSTON MEDICAL

CENTER

81

$35,092,153

NA

$7,998

$6,453

No data

TUFTS MEDICAL CENTER

77

$25,969,675

$25,294 (44% of all admissions)

$7,017

$7,925

No data

Non NIH-funded hospitals

North Shore Medical Center

$22,385

$8,159

$8,204

No data

Mt Auburn Hospital

$21,108

$6,357

$6,734

$9,188

 

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