U.S. Hospitals
Charging Widely Varying Prices for the
Same Medical Procedures
A CMS report showed that the cost for the same treatment varies among
hospitals in different regions as well as in the sam...
companies also do not pay the full charge to hospitals but negotiate
payments with them for certain treatments. Patients c...
About Outsource Strategies International
Outsource Strategies International (OSI), a reputable medical billing and
coding ...
Upcoming SlideShare
Loading in …5
×

U.S. Hospitals Charging Widely Varying Prices for the Same Medical Procedures

256 views

Published on

A CMS report showed that the cost for the same treatment varies among hospitals in different regions as well as in the same area or city

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
256
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

U.S. Hospitals Charging Widely Varying Prices for the Same Medical Procedures

  1. 1. U.S. Hospitals Charging Widely Varying Prices for the Same Medical Procedures
  2. 2. A CMS report showed that the cost for the same treatment varies among hospitals in different regions as well as in the same area or city Earlier in the year, the Centers for Medicare and Medicaid Services (CMS) released data for 3,330 hospitals which showed that the cost for the same medical procedure varies widely across the U.S. What startled the public and policy makers was that in some cases, the difference was 52 times greater! The data is based on bills submitted from almost every hospital in the country in 2011 for the 100 most common hospital treatments and procedures such as hip replacements, heart operations and gallbladder removal. Staggering Variations in Cost Charges for chronic obstructive pulmonary disease (COPD) among hospitals in the New York area varied from $99,690 per patient to $7,044. In the Los Angeles area, the cost of treating the same pneumonia condition varied by as much as $100,000 in the case of two hospitals. The cost of a joint replacement in New York ranged between $15,000 and $155,000. A hospital in California charged an average of $123,885 for a major artificial joint replacement. This was seen to be much higher than other hospitals in the Los Angeles area. ---------------------------------------------------------------------Variations in medical procedure costs per patient across geographical locations in the U.S. Chronic obstructive pulmonary disease (COPD) in the New York area New Jersey - $99,690 The Bronx - $7,400 Heart failure Denver, Colorado - $21,000 to $46,000 Jackson, Mississippi - $9,000 to $51,000 Joint replacement Ada, Oklahoma - $5,300 Monterey Park, California - $233,000 -------------------------------------------------------------------------------------An analysis of the data also showed that hospitals were charging a rate that was significantly higher - three to five times - than the average amount of Medicare reimbursement for the procedure. Who is affected? Medicare uses a system of standardized payments and does not reimburse the amount that hospital charges for specific treatments. Private insurance
  3. 3. companies also do not pay the full charge to hospitals but negotiate payments with them for certain treatments. Patients covered by Medicare and those who have private insurance, are not directly affected by what hospitals charge them. Experts have pointed out that it is people without health insurance who are likely to be hit when they are presented with hospital bills that have little relevance to the actual cost of treatment. Explaining the Cost Differences Both hospitals and federal officials have put forward reasons for these variations in hospital billing -According to government officials, the variations could be explained by the longer hospitalization needed by patients who are sicker -Hospitals are known to raise charges to pay for technology upgrades and education and research and to make up for their operational efficiencies -The prices of health care services may differ from region to area, including labor costs and other local economic circumstances, though this does not explain the variations in charges in the same city -Teaching hospitals were found to have sent higher bills to Medicare. Such medical centers have a higher cost structure and a higher volume of patients with many health complications. Medicare pays a higher rate to teaching facilities or hospitals in places where labor costs are higher -Hospitals charge higher rates as they hoped to negotiate discounts with private health insurance companies while managing their revenues. Private health insurance companies usually pay more for the same health care than Medicare does, which means higher premiums for the insured. Despite these explanations, there is still a lot of debate on the methods that hospitals are using to fix charges. What really matters is the segment of the population that is uninsured. Obamacare is set to change that with the health insurance mandate that requires every individual to get coverage starting in 2014 or pay a fine.
  4. 4. About Outsource Strategies International Outsource Strategies International (OSI), a reputable medical billing and coding company based in the USA, consistently delivers accurate and timely medical billing and coding services to medical professionals. Our quality, affordability and ability to soar above client challenges make us a popular choice. Contact Details Headquarters: 8596 E. 101st Street, Suite H Tulsa, OK 74133 Main: (800) 670 2809 Fax: (877) 835-5442 E-mail: info@managedoutsource.com URL: http://www.outsourcestrategies.com

×