"This Is Not a Bill"

Even if we know the costs, competitive hospital pricing has a long way to go.

photograph by Allison14 | Dreamstime

Baptist Memorial Hospital bills Medicare $51,152 for a drug-coated stent insertion, while Methodist Hospital bills Medicare $80,635 and St. Francis Hospital bills $82,211 for the same procedure. All three hospitals are in Shelby County.

To put in a pacemaker, the charges are $51,483 at Baptist, $76,490 at Methodist, and $61,614 at St. Francis. So it goes, for scores of medical procedures at nonprofit and for-profit hospitals all over the country.

For the first time, the federal government has released the prices that hospitals charge for the 100 most common inpatient procedures. The charges have been mostly secret to the average person. What the numbers reveal is a healthcare system with lots of variation in the costs of services.

What Medicare actually pays is another number, and the same goes for insurance companies and the patient. Here are more comparisons for charges and amount paid (in parentheses) to the three hospitals:
 So, is this a big deal or one of those things like the national debt, public pension obligations, and food additives that is vaguely troubling but too much like homework to worry about? As a reporter, I am pledged to stand for disclosure, but sometimes more is less. Even with the help of our company’s benefits and insurance expert, I found the data overwhelming and not especially useful.

Hospital “choice” is largely influenced by insurance coverage, preferred providers versus out-of-network providers, and other things beyond the patient’s control. The simplest charges are anything but simple on a typical insurance “explanation of benefits” statement. I am looking at one EOB for a visit to an eye doctor. The total charge was $100, the “Humana discount” $37.43, the copay $50, and the amount Humana paid $12.57. For prescriptions, there is a billed cost, a copay, plan payment, and a Humana discount for each one.

Over time, the report on Medicare charges may result in lower costs to patients if hospitals are impacted the way mortgage lenders and brokerage firms were when their charges became easier to compare. But for anyone taking a bill to Hospital A with a comparison price from Hospital B or Hospital C and expecting a reduction, good luck with that.

A government document dump isn’t healthcare reform. That will happen only when hospitals compete like big-box retailers, car dealers, and travel websites, with pitches like this:
“Buy one, get one free.” Imagine the response from aging baby-boomers and weekend warriors nursing bad knees, sore feet, tender hips, and arthritic shoulders. See our monthly advertised specials, and remember to bring a coupon for a free physical!

“We’ll beat any advertised price.” Worried about overpaying for that colonoscopy? Show us a competitor’s price and bring it to our friendly intake department and we’ll knock off 10 percent. We absolutely will not be undersold! Fine print: Certain exceptions may apply to medical tourism.

“The NOT frequent flyer program.” A takeoff on the airlines’ favorite promotion, this one would reward people who go to doctors as little as possible by taking charge of the one thing fully within their control — their personal diet and lifestyle decisions. The less you use, the more you save. Can also cash in for magazine subscriptions.

“Name your price.” William Shatner takes the Priceline approach to hospitals. Bidders set their price, and find out within an hour whether it is accepted by anyone within a radius of 100 miles. Winning bidders may have to spend up to one extra day in the waiting room.

“Off-peak pricing.” Folks, we have to turn on the lights and bring in the staff anyway, and this equipment is really expensive, so come in Monday at 2 a.m. and get the Early Bird Special. May not be used with any other promotion, and offer is subject to change without notice.

Finally, the most powerful word in retailing history: SALE.    

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