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    In Southwest Georgia, Insurance Costs Run High


    'They Deliver The Care'

    It’s challenging to assess hospitals' prices here because, like most places, contracts between insurers and hospitals are kept private. Morgan Kendrick, president of Blue Cross and Blue Shield of Georgia, the only insurer in the marketplace, said Phoebe is "slightly more expensive" than hospitals in other markets, but the insurer has no other options.

    "There are not many choices from the provider perspective," Kendrick said. "They deliver the care in that area, period, stop."

    Joel Wernick, president and CEO of the hospital system, said complaints of high prices are unsubstantiated. "We've not really raised prices or altered our prices in some time," he said in an interview.

    But insurance brokers and health policy experts said that Phoebe's rates for private insurers are higher than they would otherwise be to make up for the money the system loses when it cares for the large uninsured population. Aside from MillerCoors and Procter & Gamble, there are not a lot of large employers that hospitals and doctors usually rely on for rich payments. "At the end of the day, if you're an institution this size and you've got a small commercial population, you've got to get that money from somewhere,” said John Crew, a Savannah consultant to hospitals and physicians.

    Almost 11 percent of Phoebe's bills were not collected because the services were provided to patients who either couldn’t or did not pay, according to the hospital’s most recent audit. Erik Johnson, an expert on hospital finances at Avalere, a consulting firm in Washington, said the amount of uncompensated care is "very high."

    "I would expect to see that in a public hospital," he said.

    Expensive Therapies

    Yet Phoebe has aggressively added expensive new treatment machines, such as the da Vinci Robotics Surgical System and TomoTherapy, which claims to deliver radiation with more precision. Phoebe told bond investors that its cancer center is "one of the busiest centers in the Southeast." Wernick said Phoebe’s growth has enabled it "to achieve a very important community strategy to allow people to stay at home for certain services."

    Fri, Jan 31 2014

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