What Arkansas hospitals charge, even for the same medical procedure within the same city, can vary by tens of thousands of dollars, according to recently released 2011 federal data.
For example, an uncomplicated joint replacement procedure cost $75,655 on average at St. Mary’s Regional Medical Center in Russellville in 2011.
At Little Rock’s Baptist Health Medical Center, the average charge for a similar procedure was $38,887.
In Jonesboro, at St. Bernards Medical Center, the charge averaged $18,520.
The 2011 data on the average price of the 100 most-common medical procedures at more than 3,000 U.S. hospitals show wide cost variations, some of them in the same cities or geographic areas. Released last week by the U.S. Centers for Medicare and Medicaid Services, the data raise questions about how treatment prices are determined and why the information has been so hard to get in the past.
The findings are available on the U.S. Department of Health and Human Services website - www.hhs.gov - at the “chargemaster rates,” or internal price lists, that hospitals typically charged uninsured patients and those who paid out of pocket. Rates paid by private insurers and public health plans such as Medicare and Medicaid were typically much lower.
The cost information is being released for the first time with the intent to “save consumers money by arming them with better information that can help them make better choices,” said Health and Human Services Secretary Kathleen Sebelius.
“When consumers can easily compare the prices of goods and services, producers have strong incentives to keep those prices low,” Sebelius said. “Hospitals that charge two or three times the going rate will rightfully face greater scrutiny. And those that charge lower rates may gain new customers.”
Hospital charges range widely across the nation.The inpatient charges to treat heart failure at Denver hospitals, for instance, ranged from $21,000 to $46,000, while the same procedure ranged from $9,000 to $51,000 at hospitals in Jackson, Miss. Inpatient costs related to joint replacement ranged from $5,300 at a hospital in Ada, Okla., up to $223,000 at a hospital in Monterey Park, Calif.
Charges can also vary within a single Arkansas city or region. A spinal fusion procedure at Little Rock’s St. Vincent Infirmary Medical Center averaged $66,667, according to the federal data. Arkansas Surgical Hospital in North Little Rock charged an average of $32,782.
The disparities puzzled Jon Blum, director of the federal Centers for Medicare and Medicaid Services. He said the variations could be attributed to the health status of the patient, whether a hospital charges more because it trains future doctors, and even whether a hospital has higher capital costs that are passed on to patients.
But Blum added: “Those reasons don’t seem very apparent to us.”
He said the charges “don’t seem to make sense to us from a consumer standpoint. There’s no relationship that we see to charges and the quality of care that’s being provided.”
In a statement, Rich Umbdenstock, president and chief executive officer of the American Hospital Association, said the hospitals’ price lists are a part of the health-care system that urgently needs updating. He said variations in the prices are a “ byproduct of the marketplace, so all parties must be involved in a solution, including the government.”
“The complex and bewildering interplay among ‘charges,’ ‘rates,’ ‘bills’ and ‘payments’ across dozens of payers, public and private, does not serve any stakeholder well, including hospitals,” Umbdenstock said in the statement. “This is especially true when what is most important to a patient is knowing what his or her financial responsibility is.”
Bo Ryall, president and CEO of the Arkansas Hospital Association, said chargemaster rates are required by the federal government and have little relevance to how much hospitals are actually paid by insurers or consumers.
“They’re a bit misleading,” he said.
He said a variety of factors figure into the prices that hospitals use on the chargemaster sheet, and they do not reflect how much a hospital is actually paid for a particular procedure.
The federal data support that, showing that Medicare usually pays much less - 50 percent, 60 percent or more - than what hospitals charge. For example, UAMS Medical Center in Little Rock reported an average charge of $37,971 for joint replacement, according to the data. But Medicare reimbursed, on average, $16,350.
In an e-mail statement, Steve Spaulding, senior vice president for enterprise networks for Arkansas Blue Cross and Blue Shield, said insurers and hospitals work constantly to build relationships that offer patients quality care at reasonable prices.
“There’s a balance between keeping payments affordable for patients while allowing the hospitals to be financially able to provide the care. Arkansas Blue Cross and Blue Shield works continually with hospital partners to find a balance that serves the best interest of all of our stakeholders,” Spaulding said.
Arkansas Blue Cross and Blue Shield is the largest health insurer in Arkansas.
Researchers have long known that hospital costs vary even at places just a few miles apart. Dartmouth Atlas of Health Care has studied varying medical costs for more than 20 years. The Centers for Medicare and Medicaid Services’ report is the first time, however, that data from individual hospitals have been made available to the public.
Additional hospital-cost data, possibly on outpatient charges, will be made public in the future, Blum said, as part of the Obama administration’s health-care overhaul goal of increased medical-cost transparency and savings. The agency will provide this and other data to different organizations that collect, analyze and publish health-pricing information.
Information for this article was contributed by Tony Pugh of the McClatchy Washington Bureau; Lisa Hammersly and John Magsam of the Arkansas Democrat-Gazette; and Alex Wayne of Bloomberg News.
Arkansas hospital costs Charges vary widely among hospitals across Arkansas and the nation, according to federal data released last week. The charts below show three diagnoses and the average charges for treatment by individual Arkansas hospitals. What Medicare actually paid was lower than the amount charged. Medicare's range of payments is noted below each chart.
Front Section, Pages 1 on 05/12/2013