A ground-breaking report released today reveals wide disparities in the amounts Pittsburgh-area hospitals received for cardiac surgeries, with the University of Pittsburgh Medical Center paid thousands more than its rivals without offering a superior level of care as measured by mortality and readmission rates.

		Graphic: The cost of heart surgery Read the report: The report and related data are available on the Pennsylvania Health Care Cost Containment Council Web site.

The variations are no surprise to insurers, who provided 2005 payment data for the report, produced by the Pennsylvania Health Care Cost Containment Council. And consumers are unlikely to change hospitals based on the pricing information because health plans shoulder the bulk of the cost of their care.

But one small business representative hopes the new data will motivate employers to demand a greater equality in pricing from hospital to hospital.

"If you are going to charge more, you have to show a better result," said Cliff Shannon, who represents small- and medium-sized manufacturers as president of SMC Business Councils in Churchill. "That is what we expect when we buy a car. God knows, health care is more important than the car we drive."

Referring to UPMC, the nonprofit hospital conglomerate that has major operations in Oakland, he asked: "What kind of rational decision is it to go into the city, find parking in Oakland and have the surgery cost 50 percent more? For a lot of employers, those are the questions that will echo in their heads as they think about their next health care budget."

The two highest-paid hospitals, according to the state agency that seeks to address the cost and quality of health care, were UPMC Presbyterian and UPMC Shadyside, two of 19 institutions controlled by the region's dominant medical provider and biggest employer. Together, in 2005, the East End hospitals received an average of $34,803 for coronary artery bypass graft surgery -- used on patients with significant artery blockage.

No hospital in the area received more. The average payment for the same procedure at the North Side's Allegheny General Hospital was $23,715, while at Jefferson Regional Medical Center in the South Hills, the cost was even lower: $18,009.

Yet the level of care at Jefferson Regional and Allegheny General, as measured by mortality and re-admission rates, was not inferior to that at the two UPMC facilities. In fact, Allegheny General had a lower readmission rate than its crosstown rival.

"There are dramatic differences in payment within the region that don't make a lot of sense," said Marc Volavka, executive director of the cost containment council. "Someone has to ask, 'Why'?"

The statewide report "shows that quality of care has no apparent relationship to the cost of care," said Mr. Shannon, also a board member of the cost containment council. "More expensive does not equal better; less expensive does not equal worse. How much of a premium should we have to pay to go to the brand-name hospitals in Pittsburgh when the quality of care is no better?"

The release of this report, more than a year in the making, provides greater transparency to the often-opaque discussion of rising health care costs across the region and the state

The report is unusual for including average payments made to hospitals for patients covered by commercial insurance. Past reports typically included "charges" -- the amount a hospital bills for a patient's care -- but not the final payment. Hospitals generally do not receive full reimbursement for their charges because insurers or other large purchasers negotiate discounts.

While the two UPMC hospitals had the highest commercial payment rate in the region for coronary artery bypass surgery, some hospitals elsewhere in the state were paid more.

Philadelphia's Hahnemann University, for example, had an average payment of $78,312. At the Hospital of the University of Pennsylvania, the figure was $60,733. Temple, also in Philadelphia, was paid $57,533 for the same procedure.

UPMC spokesman Wendy Zellner cited those differences as a better point of comparison, since they are all academic medical centers, like UPMC, and in that group, UPMC Presbyterian and Shadyside have the highest volume of bypass surgeries and the lowest average payment rates.

Within southwestern Pennsylvania, "various factors affect average charges and payment, including the nature and complexity of the cases that we treat," Ms. Zellner said. The growth in patient volume at UPMC "suggests that insurers and patients believe that we are providing high quality care at a fair price."

Higher prices for UPMC services were an issue last month when the state attorney general's office announced an agreement regarding the planned merger of the region's largest health system with Mercy Hospital.

State officials didn't want the merger to result in higher prices at Mercy, noting that they are currently lower than at UPMC. Health system officials agreed to extend existing health plan contracts at Mercy and their pricing for eight years, with allowances for inflation. Before it could take place, the merger also would need approval from the Federal Trade Commission and the Vatican.

At Mercy, the average payment for a coronary artery bypass was $25,315 -- almost $10,000 less than at the two UPMC facilities (but more than the $24,834 paid to UPMC Passavant, a community hospital in the North Hills). "I don't know if I can explain that great discrepancy," said Dr. Ross DiMarco Jr., chief of cardiovascular and thoracic surgery at Mercy.

West Penn Allegheny Health System, parent of the West Penn Hospital and Allegheny General, raised the same question yesterday, noting that its hospitals performed "on par or better" than the two UPMC hospitals in the East End and still UPMC is paid more.

"In any other market, quality and efficiency are rewarded," said Tom Chakurda, spokesman for West Penn Allegheny. "That does not appear to be the case in health care."

Despite the variation in payment, mortality and hospital readmission rates at local hospitals were generally what would be expected for bypass and valve surgeries, according to the cost containment council report. Some facilities, including Allegheny General, St. Clair Memorial and The Medical Center, Beaver, had lower-than-expected rates for some surgeries. Washington and Westmoreland Regional hospitals, however, had some that were higher than expected.

For a variety of reasons, large medical centers are able to negotiate higher payment rates from insurers or other purchasers, said Dr. Carey Vinson, vice president for quality and medical performance management at Highmark.

The medical care they provide, along with teaching and research, represent "a unique set of services to the community," Dr. Vinson said. "They parlay that into asking for greater reimbursement."

Large centers also contend they treat more complex needs and have higher costs, he said.

But smaller hospitals also try to strengthen their negotiating position -- for example, by noting if they are the only medical facility in a particular area, Dr. Vinson said.

"All hospitals try to leverage their uniqueness when they can," he said.

Medicare payment rates for the cardiac surgeries also varied, according to the report. Medicare officials noted that those rates can be affected by a number of factors, including whether hospitals are teaching facilities or serve large numbers of poor patients.

The report also noted that mortality rates, lengths of stay and payments were much higher when patients having the cardiac surgeries acquired infections in the hospital.

Jessica Seabury, executive director of the Consumer Health Coalition, said payment incentives are needed that better promote good care. Her group works to increase access to quality, affordable health care in southwestern Pennsylvania.

Carolyn Scanlan, president of the Hospital & Healthsystem Association of Pennsylvania, the hospital industry's main lobby in the state, noted that the report indicates that in-hospital mortality rates for cardiac bypass surgeries have continued to drop. She said more study is needed concerning the payment data and information on hospital-acquired infections and lengths of stay.