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How the Amish Drive Down Medical Costs

How the Amish
Drive Down Medical Costs

By JOEL MILLMAN
February 21, 2006; Page B1

LITITZ, Pennsylvania -- When Health Management Associates Inc. opened a regional hospital in Pennsylvania Dutch Country in 2004, it got an unexpected welcome from a group of men wearing broad-brimmed hats and beards.

The delegation of Amish and Mennonite elders came to the Heart of Lancaster Regional Medical Center to haggle with executives there over rates. They wanted discounts for their fellow worshipers, who collectively spend about $5 million a year in Lancaster County for health services, all of it in cash.

Like uninsured patients everywhere, the Amish and Mennonites often are billed a hospital's full retail price for medical procedures and pharmaceuticals, mainly because they don't have a large institution, such as an employer or insurer, to negotiate discounts on their behalf. But unlike many of the uninsured, they were able to organize and drive down the price of medical care in Pennsylvania.

The "Plain People," as Amish and Mennonites call themselves, choose to go without insurance or Medicare as part of their rejection of the secular world. They do without electricity and automobiles in their daily lives. And they rarely sue for malpractice, believing that the outcome of surgery is in God's hands.


What helped make the Amish effective negotiators was the experience many of them have had in getting cut-rate medical treatment in Mexico. They were able to use prices south of the border -- along with their willingness to pay upfront in cash -- as leverage to bargain for lower prices at home.

No deal, no patients, they told the Heart of Lancaster executives. And the medical center proved willing to bend. "We felt we needed to grow the business of this hospital. We also need to be part of a community," says Kimberley Steward, who helped negotiate a deal as the medical center's chief financial officer and now works at Health Management Associates' Mesquite Community Hospital in Texas.

The German-speaking Mennonites and Amish are Anabaptists, a religious denomination that traces its history back to the Protestant Reformation of the 16th century. "Anabaptist" refers to the practice of rejecting infant baptism; only adults are permitted to pledge themselves into the church. They object to medical technology that they believe challenges God's plan, such as organ transplants and in-vitro fertilization, but they don't reject all medical care outright, as some other religious denominations do.

Heart of Lancaster is a small hospital, and its case load is fairly conventional. But the Anabaptists weren't looking for anything exotic. They wanted discounts on services such as orthopedic surgery, biopsies and childbirth. The hospital agreed to discounts of up to 40% off its top rates, resulting in prices that would still be slightly higher than Medicare reimbursements, the level most hospitals consider a minimum. Not satisfied, the Anabaptists pushed the executives to go lower. But the hospital said if it dropped prices to levels below Medicare reimbursements, it could be charged for fraud for charging Medicare patients more.

The Anabaptists accepted the hospital's offer and now pay flat rates such as $16,577.60 for a hip replacement, $3,200 for knee arthroscopy, and $7,542 for a mastectomy. The rates include the hospital stay as well as fees for surgery, anesthesia, medication, testing, medical supplies and occasionally outside specialists. To qualify for these discounts, the Anabaptists pay 50% of the fees upon admission to the hospital. The Anabaptists' rates are still more than what a Medicare patient might expect to be billed, but as little as half the full retail rate other uninsured patients are likely to be charged.

For decades, Anabaptist communities have pooled resources to pay for medical care. But as the cost of a modern-day hospital stay has skyrocketed, cost-sharing has often fallen short. "A man's barn burns down, you can replace it with donated labor in an afternoon. You can't do that with a hospital bill," says Sam Stoltzfus, who farms near Gordonville, Pa. About a third of Anabaptist community resources go to cover health-care costs, he estimates.

Many Pennsylvania Anabaptists who are stretched financially take trains to Tijuana, where private hospitals and clinics usually charge far less than the top rates at Pennsylvania hospitals. After the Anabaptists' busy November wedding season, travel usually picks up in early December. Even though travel expenses can run to $4,000 a person, Anabaptist patients say they save money. "Going to Mexico also provides a little diversion," says Donald Kraybill, a sociologist at Pennsylvania's Elizabethtown College who specializes in Anabaptists. "People who spend their lives in rural settings like to go to a motel sometimes, watch cable TV and eat in a restaurant."

The Oasis Clinic, operated by an oncologist, Adán Ernesto Contreras, is a favorite of the Anabaptists. At a seaside hostel, Anabaptist men stroll along a plaza with their wives, who wear starched, white bonnets. A small plaque on a footbridge reads, "My Hobby Is Driving My Buggy." A bale of fan mail from former patients arrives daily. "Greetings Christians!" begins one letter from Paoli, Ind.

Dr. Contreras, who speaks fluent English, says he is conversant in the archaic Rhineland German many of his Anabaptist patients speak at home. "We treat them body, mind and spirit," he says cheerfully. "Before any procedure, I pray with them." In the lobby and corridors of the hospital, the Amish rub elbows with sheikhs and tanned Californians, who also come to Tijuana for treatment but stay in more expensive quarters.

Back in Pennsylvania, testimonials about cancer and arthritis treatments in Tijuana spread quickly through tight-knit Amish and Mennonite communities. Tijuana's Oasis clinic ran ads this summer in Die Botschaft, an Amish newspaper, promising medicine with "a caring environment, prayer, laughter, faith, hope and love."

Visits from sales representatives of clinics in Tijuana, Ciudad Juarez and Mexicali have become a form of folk entertainment in the rural communities where Plain People live, an evening of charts on easels, testimonials and refreshments for people who avoid most forms of modern media.

For all the come-ons, though, the visits provide Anabaptist elders with medical price benchmarks with which to compare rates at local hospitals. In negotiations with Heart of Lancaster executives, the Anabaptists agreed early on to flat-rate packages, because, like many consumers, they had a hard time making sense of hospital-bill complexities. A full knee replacement costs $14,922.80, including a four-day hospital stay; a partial knee replacement costs $10,500, including a two-day stay.

Heart of Lancaster wasn't worried about risking steep losses if elaborate surgeries went awry: Anabaptist patients generally don't want such procedures. "If you're paying out of pocket, you'll hunt for bargains," says Lee Christenson, chief executive of Heart of Lancaster, who bargained with the Anabaptist elders. "Basically, the Amish won't pay for health care they don't need."

Before cutting the final deal, Heart of Lancaster had to grapple with the issue of whether the package of discounts for Anabaptists could open the medical center to accusations of discrimination from uninsured patients of other faiths. The two sides consulted lawyers, who agreed the hospital couldn't treat uninsured Anabaptists differently than it did other uninsured patients -- even though Anabaptists were pledging to pay upfront, unlike other uninsured. Moreover, the hospital knew that, as a practical matter, virtually every uninsured patient within miles is a member of either an Amish or Mennonite church.

The solution? Anabaptist elders decided that their parishioners would be sent to the hospital only after being referred by local doctors with largely Anabaptist practices. As a legal matter, the discounts are for referrals from these doctors, not for members of a particular church. And the elders pledged that none of the patients sent to Heart of Lancaster would ever sue for malpractice.

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