Hospital Charges Surge for Common Ailments, Data Shows

Charges for some of the most common inpatient procedures surged at hospitals across the country in 2012 from a year earlier, some at more than four times the national rate of inflation, according to data released by Medicare officials on Monday.

While it has long been known that hospitals bill Medicare widely varying amounts — sometimes many multiples of what Medicare typically reimburses — for the same procedure, an analysis of the data by The New York Times shows how much the price of some procedures rose in just one year’s time.

While hospitals say they are unimportant — Medicare beneficiaries and those covered by commercial insurance pay significantly less through negotiated payments for treatments — others say the list prices are meaningful to the uninsured, to private insurers that have to negotiate reimbursements with hospitals or to consumers with high-deductible plans.

“You’re seeing a lot more benefit packages out there with co-insurance amounts that require the holders to pay 20 percent of a lab test or 20 percent of an X-ray. Well, 20 percent of which price?” asked Glenn Melnick, a professor who holds a Blue Cross of California endowed chair at the University of Southern California. “Some hospitals will charge 20 percent of what Blue Cross Blue Shield will pay; others will play games.”

It makes you wonder what aggregate health care spending really is. My daughter had a recent ER trip that ended up costing $1k; supposedly that was a discout from the going rate of 5k because she was covered by BC/BS, which didn’t pay a dime , while I coughed up $1000.00 that could have been avoided with a simple phone call to the house.

“while I coughed up $1000.00 that could have been avoided with a simple phone call to the house.”

There's an opportunity here to put little satellite walk in offices across from/ next to every busy ED. Offer cheap triage (if you need to go to the ED, we'll confirm this; and if not, it's a much smaller payment for something we'll take care of here). The problem is the malpractice rates and the pushback by the hospital EDs.

What was the general nature of your daughter's ED visit?

“Total administrative costs are surging, mainly due to the increased administrative effort needed to deal with ever increasing government regulation.”

Yes, but for the time being at least, big hospitals and hospital systems are getting huge subsidies, so they are awash in money, and it is the administrators and their accountants and attorneys who choose what to do with that money.

They know that this money is not perpetual, so they're doing what they think will lead to sustained profits. This includes buying up private practices that give them regional monopolies; rewarding physicians who generate the most income (not necessarily the best physicians); and peeling away those who are less profitable for them.

Hospitals get paid more for ‘tests’ (e.g. imaging studies etc.) than a private physician's office can (substantially more), so hospitals are buying up practices that do their own imaging, and as long as these facilities exist within a certain distance from the hospital, they can then call the facility a ‘hospital facility’ and charge more for the testing.

Plus, a lot of the ‘administrative’ responsibilities are now put on the shoulders of physicians and nurses, who do not get paid extra for doing these things (more forms and computer-based documentation for every patient visit or procedure etc).

In the meantime, multiple administrators with 7 figure incomes is not an uncommon occurrence at most large hospitals or hospital systems these days.

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