EagleTribune.com, North Andover, MA

May 10, 2013

Hospital charges vary greatly

Federal data shows striking differences

By John Toole
jtoole@eagletribune.com

---- — Consumers are getting a comparison of health-care charges among the nation’s hospitals this week.

The numbers show wide differences, the federal government acknowledged.

Care for a heart attack without complications cost $25,723 at Parkland Medical Center in Derry, compared to $17,442 at Elliot Hospital in nearby Manchester.

In Massachusetts, Lawrence General charges a heart attack patient $13,297. At Massachusetts General in Boston, the charge is $31,265.

In releasing numbers based on 2011 reporting, the government aims to make the health system more affordable and accountable.

“Users will be able to make comparisons between the amount charged by individual hospitals within local markets, and nationwide, for services that might be furnished in connection with a particular inpatient stay,” the Centers for Medicare and Medicaid Services said in releasing the information.

Consumers are getting a look at price tags for 100 of the most common treatments and procedures.

Major joint replacements in the leg ranged from about $32,000 at Elliot and Dartmouth-Hitchcock to more than $69,000 at Parkland.

The charges went from nearly $35,000 in Lawrence to about $37,000 at Merrimack Valley Hospital in Haverhill, $37,500 at Holy Family in Methuen and about $57,000 at Massachusetts General.

Treatment of simple pneumonia cost about $9,000 at Elliot and nearly $12,000 at Dartmouth to more than $16,000 at Parkland.

Massachusetts General charged more than $22,000, compared to about $9,500 at Holy Family, $8,500 at Merrimack Valley Hospital and about $8,000 at Lawrence General.

Hospitals questioned the information, taking the position few consumers actually pay those charges.

The American Hospital Association said Medicare unilaterally sets hospital payment rates through regulation, resulting in payments averaging about 95 cents on the dollar for allowed costs, while large insurers negotiate rates.

“Variation in charges, therefore, is a byproduct of the marketplace, so all parties must be involved in a solution, including the government,” AHA president and CEO Rich Umbdenstock said.

“Be careful about drawing too many conclusions from one set of data,” New Hampshire Hospital Association president Steve Ahnen said.

Because of Medicare and private insurance coverage, Ahnen said, the information may not be that revealing.

Even the uninsured see discounted expenses through hospital financial assistance programs, he said.

“The fact there are these charges really isn’t that meaningful in terms of the final bill, what gets billed and paid,” Ahnen said. “Who’s paying these full charges is really a good question.”

Ahnen acknowledged having more information available isn’t a bad thing, but said what’s most important for the consumer is the portion of the bill they actually pay.

“There are many appropriate causes for price variation, including how much it costs in any given area to buy all of the goods and services needed to provide care; the varying care needs of patients; demographics and socio-economic factors and the cost of medical education and caring for the most vulnerable residents in our society,” said Catherine Bromberg, spokeswoman for the Massachusetts Hospital Association. “These factors should be taken into consideration when reviewing both hospital charges and actual reimbursements.”

Bromberg also said hospital charges primarily impact uninsured patients, “a problem Massachusetts has largely mitigated with its universal coverage law.”

“For the approximately 3 percent of state residents that remain uninsured, as well those who are underinsured, the Health Safety Net program supports care that’s provided at hospitals and health centers,” she said. “This program is primarily paid for by hospitals themselves, as well as with funds from insurers and government.”

Others said the information matters and benefits consumers.

“We think it’s fantastic this type of information is available,” said Max Puyanic, CEO of ConvenientMD, a budding group of urgent care centers with offices in Windham. “Historically, people didn’t have enough information. We think consumers need to be more informed about the cost of health care they are consuming so they can make better decisions.”

AARP praised the information, as far as it went.

“We believe there is value to transparency coming out in the health-care space,” senior legislative representative Andrew Schwab said.

But there is more to do, he said.

“There’s no real system in place linking cost and quality,” he said, “and having consumers aware.”

Schwab said the new federal numbers surprised even people working in health care.

There is some evidence that in the cases of teaching hospitals, such as Massachusetts General, health care costs more, he said.

AARP’s Andrew Scholnick, also a senior legislative representative, said consumers, especially seniors, need to ask about costs, medical options and how long they can expect to be treated.

“Don’t be afraid to ask questions,” he said.

To see a searchable database, visit data.cms.gov/Medicare/Inpatient-Prospective-Payment-System-IPPS-Provider/97k6-zzx3.