Hospital price differences - portrait of a broken system

[kevink]

I saw this first in "Huffington Post," but it looks like all the major newspapers and wire services are honing in on a newly released federal data base of hospital costs (there's a link to it in the article below). The first couple of paragraphs give a good sense of the huge range of costs for the same procedure even among hospitals in the same geographical area:

"When a patient arrives at Bayonne Hospital Center in New Jersey requiring treatment for the respiratory ailment known as COPD, or chronic obstructive pulmonary disease, she faces an official price tag of $99,690.

Less than 30 miles away in the Bronx, N.Y., the Lincoln Medical and Mental Health Center charges only $7,044 for the same treatment, according to a massive federal database of national health care costs made public on Wednesday."


I suspect this is just the beginning of what may well become a deluge of reporting:

Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences

 

[travelover]

This has been an area of opacity for too long. I'm really glad to see a new awareness of an indefensible system. Of course before it is done, it will be probably be taken out of the hides of the hospital employees and the CEOs will continue to thrive.

 

[kevink]

My wife and I have been living as expats in Mexico for the past few years and have gotten very used to clearly posted prices for common procedures. Heck when I need an x-ray or lab test locally I call around now to check prices first!

We have catastrophic health insurance here but pay out-of-pocket for routine stuff and I've gotten very used to just calling up whatever doctor (including specialists) I want to see, talking directly to the doc (usually on their cell) and seeing them in a day or two, max and paying cash (typicall about $22 for a GP, double that for a specialist). Hope to return to the U.S. one day to live, but I think I'd be the "patient from hell" now due to being thoroughly unaccustomed to (and intolerant of) the layers of intemediaries, red tape, insurance and (last not least) utter opacity about cost that are standard operating procedure back home.

 

[travelover]

My wife and I have been living as expats in Mexico for the past few years and have gotten very used to clearly posted prices for common procedures. Heck when I need an x-ray or lab test locally I call around now to check prices first!

..........

Oh, that couldn't work here..um...hem...lots of regulations...ah, different circumstances...research!.....quality of care...I'll get back to you on that.......

 

[Fishingmn]

Medical billing is such a crock.

My daughter got a splinter in her foot that she couldn't remove so she went in to the local clinic. Took them 5 minutes to remove it.

They billed her $750.

Used a billing code that involved using a scalpel (which they didn't really use) because that's the best they could come up with on short notice. We are fighting it but it just shows the insanity. Funny thing was the insurance company BC/BS didn't seem to care - just paid their half and had no interest in challenging it.

 

[daytripper]

I love having price transparency in open and competitive markets..

I hate it when prices are hidden or just too difficult to find.
I don’t even like it when I go into a restaurant and they don’t post prices for alcohol!

 

[travelover]

Medical billing is such a crock.

My daughter got a splinter in her foot that she couldn't remove so she went in to the local clinic. Took them 5 minutes to remove it.

They billed her $750.

Used a billing code that involved using a scalpel (which they didn't really use) because that's the best they could come up with on short notice. We are fighting it but it just shows the insanity. Funny thing was the insurance company BC/BS didn't seem to care - just paid their half and had no interest in challenging it.

And you got the insurer's negotiated rate. If you had no insurance, you would have had to pay the full price.

 

[rodi]

Semi related - I just had an eye opening experience how different insurance can effect the negotiated price.

Son #1 started his braces while I had Insurance A. Insurance A negotiated the total price down (before coverage) by $1500 - then covered 20% - up to $2000 lifetime total

My division was sold off - change in benefits mid year.

Son #2 started braces today. Much less work, shorter time frame, etc. But Insurance B does not negotiate the price down as much (good for the orthodontis, bad for me) - only $150 savings.

So son #2, who is having MUCH less work done, over a shorter time frame, is going to cost me $1000 more - because the billable amount wasn't negotiated down by the insurance B.

The whole system is a total mess.

 

[kramer]

Lack of transparent pricing *and* high "list prices" are the most horrible things about the American medical system. Hopefully, this can start to shine some light in this area and shame some hospitals into fair "list prices".

Apparently, the list prices are only charged to uninsured patients and they must be very high due to a grab bag of complex regulations and perverse economic incentives.

 

[Tadpole]

I saw (interviewed) a new podiatrist yesterday. Since my husband is Medicare and I will be Medicare starting in December I naturally asked about his acceptance of Medicare assignment. He hedged the question saying (unhappily) that he accepted Medicare patients.

I told him I appreciated this but I was on the other side of the tantrum doctors are throwing around here with Medicare. They are accepting the Medicare payment but not committing to Medicare assignment, leaving the patient uncertain what the next bill might do to their lives.

Finally, a doctor who was honest. He said the "tantrum" was because doctors here get less than those in Seattle and other nearby places. So it is all about what the other guy is getting not about cost.

 

[Texas Proud]

Semi related - I just had an eye opening experience how different insurance can effect the negotiated price.

Son #1 started his braces while I had Insurance A. Insurance A negotiated the total price down (before coverage) by $1500 - then covered 20% - up to $2000 lifetime total

My division was sold off - change in benefits mid year.

Son #2 started braces today. Much less work, shorter time frame, etc. But Insurance B does not negotiate the price down as much (good for the orthodontis, bad for me) - only $150 savings.

So son #2, who is having MUCH less work done, over a shorter time frame, is going to cost me $1000 more - because the billable amount wasn't negotiated down by the insurance B.

The whole system is a total mess.

Dental is a whole nuther ballgame.... but not nearly as bad as health care...


I would negotiate a price for son #2.... or look elsewhere... the difference with braces is that you can wait and do some price shopping..

 

[rodi]

I did negotiate a 5% sibling discount and am going to push for a cash discount (pay up front).

They declined the cash discount with my older son because they said the insurance company had already taken away any wiggle room. I know that's not the case with the new insurance company.

It bugs me that it's clearly not related to costs at all.

As an engineer - we're focused on bill of material costs. So we know the COST it takes to build a gizmo. (with factors for engineering, sales, admin, factory, etc.) Everything above that factored cost is profit.

With medical and dental there is little correlation to the COST (labor, facilities, overhead included) of services provided.

 

[ziggy29]

Dental is a whole nuther ballgame.... but not nearly as bad as health care...

I would negotiate a price for son #2.... or look elsewhere... the difference with braces is that you can wait and do some price shopping..

Also with dental, I've heard many people successfully negotiate discounts with providers for *not* having insurance, unlike many medical providers which charge "full rate" for the uninsured. I know some folks who have reported receiving a 5-10% discount off of negotiated insurance rates for paying in full with cash upfront. For these providers it's worth giving that discount to avoid having to file claims or waiting for payment from the insurance bureaucracy.

 

[Mulligan]

Also with dental, I've heard many people successfully negotiate discounts with providers for *not* having insurance, unlike many medical providers which charge "full rate" for the uninsured. I know some folks who have reported receiving a 5-10% discount off of negotiated insurance rates for paying in full with cash upfront. For these providers it's worth giving that discount to avoid having to file claims or waiting for payment from the insurance bureaucracy.

I get 10% off by paying cash. But it is not like I have any real choice as I have no dental insurance. I haven't figured out a way where dental insurance provides any benefit to me if I have to pay for it, so I do not have it.

 

[Khufu]

Lack of transparent pricing *and* high "list prices" are the most horrible things about the American medical system. Hopefully, this can start to shine some light in this area and shame some hospitals into fair "list prices".

Apparently, the list prices are only charged to uninsured patients and they must be very high due to a grab bag of complex regulations and perverse economic incentives.

Not only that, but it turns out that post-treatment complications make money for the hospital, a LOT of money. Oddly enough, researchers are puzzled at low penetration of procedures known to reduce such complications.

"It's been known that hospitals are not rewarded for quality, but it hadn't been recognized exactly how much more money they make when harm is done," said Dr. Atul Gawande, a professor at Harvard School of Public Health and co-author of the study, in the report.

Hospitals profit more from surgical complications - report - Apr. 16, 2013