This is so bad, I can't believe it.
Same treatment different cost
STATE LAW OPENS ONCE-SECRET PRICE LISTS TO PUBLIC
By Barbara Feder Ostrov
Mercury News
One hospital charges $14.03 for a tablet of ibuprofen, while another provides it for free. A night in intensive care ranges from about $5,200 to more than $8,000. A sheet of nine Cepacol cough lozenges costs $45 at another medical center -- something that would run you less than $3 at your local drugstore.
A Mercury News analysis of six Santa Clara County hospitals' prices for medical care reveals widely varying -- and costly -- rates for 10 common services such as colonoscopies and chest X-rays.
Nearly everyone treated at a hospital receives a bill with these so-called ``list prices,'' but what patients actually pay depends on whether they have insurance, and if so, what kind. While insured patients pay a portion of discounted rates negotiated by their health plans, California's nearly 7 million uninsured residents face the full fare.
Most of us have no idea in advance what our hospital stay will cost, or why prices vary so much from hospital to hospital. Now, a little-known state law that took effect in July lets the public scrutinize California hospitals' once-secret price lists, known as ``chargemasters.''
Such information might have helped Michelle Samis of Santa Cruz, who received a $12,302.53 bill from Stanford University Medical Center for an outpatient shoulder operation that lasted less than three hours.
``I thought it was expensive, but heck, I don't know,'' said Samis, who has a bare-bones insurance policy with a $25,000 deductible. ``I just thought that's what it cost.''
Even for the majority of patients who don't have to pay them, the list prices shed light on the byzantine world of hospital pricing, which has come under increasing scrutiny as some hospitals' aggressive collection practices have forced patients into bankruptcy.
The hospital industry acknowledges that what hospitals charge bears little relation to the actual cost of medical care -- in part because those charges help hospitals get higher reimbursements from health insurers.
``There's zero connection between costs, charges and reimbursements,'' said Jan Emerson, spokeswoman for the California Hospital Association, a lobbying group. ``In many cases, to get $5 more from the health plans you have to raise your charges $50 or more.''
Wildly different
As a result, patients may see wildly different prices from one hospital to another, all higher than the discounted rates paid by Medicare and many health plans. That's in addition to bills they may receive from their physicians. The Mercury News found that at six valley hospitals:
• Charges for a blood test known as a comprehensive metabolic panel ranged from $149 to $520.50. Medicare pays $14.77 for this test.
• An overnight stay in the medical-surgical unit ranged from $1,909 to $3,900.
• Prices for a screening mammogram ranged from $95 to $405. Medicare pays only $69.66.
Prices like these drive patients crazy, even if they're not paying them.
Lionel Faunce was stunned by his $12,712.59 bill for a recent overnight stay at Good Samaritan Hospital in San Jose. The 79-year-old retiree from Saratoga, who has a history of heart problems, was admitted overnight for chest pains.
But after three electrocardiograms ($339 each), a basic blood test ($353) and seven applications of a nitroglycerin ointment ($15.40 each), among other treatments, doctors diagnosed Faunce with shoulder arthritis. Medicare picked up the entire tab, at discounted rates.
``I don't care who paid for it,'' Faunce said. ``it's too much.''
Seeking transparency
Such sentiments are a driving force behind new legislation that aims to force hospitals to make their prices more transparent and further discount care for the uninsured. Lawyers have filed class-action lawsuits against hospital chains, alleging price-gouging of the poor.
Hospitals argue that the chargemasters are useless indicators of their pricing because only a tiny fraction of patients ever pay those prices. Many poor or uninsured patients receive discounted care or even complete write-offs of their bills under hospitals' charity-care policies.
However, Glenn Melnick, who directs the Center for Health Financing, Policy and Management at the University of Southern California, estimates that 4 percent to 5 percent of all inpatients are either uninsured or considered ``self-pay,'' meaning that they're expected to pay cash for their treatment.
Opening price lists is a crucial first step in transforming a bewildering health financing system that prevents most Americans from knowing what their health care actually costs and how much their share will be, Melnick said. Even insured patients can find it difficult to know what their out-of-pocket costs will be.
Hospital prices affect the nation's rising health care costs even more than prescription drugs do, health experts say. Melnick estimated that six hospitals examined by the Mercury News have ``mark-ups'' above actual cost ranging from 196 percent to 607 percent, based on financial information filed with state health authorities.
The nationwide trend toward ``consumer-driven health care,'' which asks patients to take more responsibility for health care spending, makes it even more important that they know as much as possible about hospital prices. And as insurers offer health plans with lower premiums but skimpy coverage, patients increasingly must shop around for hospital treatment their policies won't cover.
``You've got to start somewhere if you want to change an industry,'' Melnick said. ``We want consumers to play a more active role in their health care, but in order for them to do it, they've got to be better informed.''
Benjamin Mesanovic has no idea what a chargemaster is, but he's facing its steep prices. In December, the 22-year-old Bosnian immigrant went to the non-profit Alameda Hospital for an emergency appendectomy, emerging three days later with $43,000 in bills from his hospital and surgeon.
Mesanovic, a waiter, had no insurance when he fell ill. He has no idea how he'll pay his hospital bill, even though the hospital offered him a discounted amount of $22,100, according to a spokeswoman.
``I feel really upset,'' said Mesanovic, admitting he hadn't responded to the hospital or its collection agency. ``The bill is so high and I cannot pay. I don't know what to do.''
California hospitals, on average, collect just 4 percent of charges from the uninsured, said Emerson of the hospital association -- a reason why some hospitals often face financial difficulties.
``Most of it is bad debt or written off as charity care,'' she said. ``Yes, they see the bill, but no, they don't pay it.''
Although hospitals' prices for care once closely reflected actual costs, Emerson said, changes in how hospitals are reimbursed by insurance plans and the government caused them to raise their list prices starting in the 1980s.
In particular, hospitals have an incentive to keep raising list prices because Medicare and HMOs in some cases pay for complex treatments based on list prices. Hospital chain Tenet Healthcare until 2002 used this strategy to get more money from Medicare and HMOs to such an extent that lawsuits were filed and federal investigators came calling.
A rising awareness of how an out-of-whack hospital financing system is affecting the uninsured has spawned a wave of state and federal legislation to lower hospital prices for the poor and make prices more transparent.
Assemblyman Dario Frommer, D-Glendale, wants to require hospitals to give price information on entire procedures, such as heart bypass surgery, rather than itemized lists of medical equipment and operating-room charges that are difficult to add up.
Another bill sponsored by Assemblywoman Wilma Chan, D-Oakland, would require hospitals to offer cheaper Medicare, Medi-Cal or workers' compensation prices to patients earning less than 400 percent of the federal poverty line.
Pushing charity care
Trying to keep a step ahead of such mandates, many hospitals are beefing up their existing charity-care policies and promoting them more aggressively.
The California Hospital Association now asks hospitals to voluntarily provide free or discounted care to patients earning up to 300 percent of the federal poverty line and to delay sending bills to collection agencies for four months.
To settle a lawsuit on behalf of the uninsured, Tenet established a companywide charity-care policy that offers the uninsured rates comparable to what its hospitals charge HMO patients.
Hospitals also are becoming savvier about billing, eliminating charges for items you can find at your local drugstore. At Tenet-owned Community Hospital of Los Gatos, a bath mitt may cost $89.50, but nurse auditor Rosemary George says she's never seen anyone charged for one.
Last month, along with several other Tenet hospitals, Community Hospital of Los Gatos stopped charging for aspirin and Tylenol and reduced its price for a 200-milligram tablet of ibuprofen from $21.50 to $1.
``Why?'' Tenet spokesman David Langess said. ``Because these charges make people nuts.''
=============================================================
The print article compares costs for 6 bay area hositals; the first proce listed is Medicare
200 mg ibuprogen tablet 0 $1 --> $9
blood test;comprehensive metabolic panel $15 $149 --> $521
EKG $28 $139 --> $457
Brain MRI $496 $2964 --> $6463
colonoscopy $566 $909 --> $2703
mammogram $70 $95 --> $405
Overnight medical-surgical room N/A $1909 --> $3900
overnight ICU N/A $5236 --> $8030
chest x-ray 2 views $56 $163 --> 551
NOTE: No hospital was at the low end or the high end on everything. |
