If you think balancing the scales of justice is tough, try balancing the costs of medical treatment.
Hospitals within the same city sometimes charge tens of thousands of dollars more for the same treatment, according to figures the government released publicly for the first time Wednesday.
The federal list sheds new light on the mystery of just how high a hospital bill might go – and whether it’s cheaper for uninsured patients to get the care somewhere else.
But it doesn’t answer the big question: Why do some hospitals charge 20 or even 40 times more than others?
Hospital charges vary because they reflect the individual hospital’s mission, the patient population it serves and the financing necessary to provide essential public services, Brian Tabor, vice president of the Indiana Hospital Association, said in an email Wednesday.
A hospital that provides vital highly specialized services, such as emergency room care 24 hours a day, seven days a week, and community outreach and social services such as trauma or burn units, has a different cost structure and pricing than one that does not.
Tabor said some hospitals provide environments for training physicians and other health care professionals, conducting medical research and taking care of a high number of uninsured individuals. All of those factors contribute to overall costs.
Parkview Health spokesman Eric Clabaugh echoed those comments.
In the case of Parkview, he said in an email, we provide vital, highly specialized services, such as verified Level 2 adult and pediatric trauma centers, an emergency room with excellent care 24 hours a day, seven days a week, numerous community outreach programs, a medical research center, and we take care of a high number of people who are receiving Medicaid or Medicare benefits and those who are under- and uninsured.
Clabaugh said Parkview doesn’t view the government report with disdain.
It’s important that everyone be aware of their options, he said. As we prepare for the next level of the Affordable Care Act, including residents who will soon be covered by government insurance, we will see more reports that will help consumers be better informed.
Lutheran Health said in an email statement that it welcomes the magnifying glass.
We value clear information being made available, and we encourage consumers to review a hospital’s quality and patient satisfaction data in addition to cost information, the hospital system stated. It will take time for the public to understand all of the data, but this will ultimately be helpful.
Not everyone shares that opinion.
It doesn’t make sense, said Jonathan Blum, director of the U.S. Center for Medicare.
The higher costs don’t reflect better care, he said, and can’t be explained by regional economic differences alone.
Blum said he hopes making the information available without charge to the public will help generate answers to the riddles of hospital pricing and put pressure on the more expensive hospitals.
The fees that Medicare pays hospitals aren’t based on their charges, Blum said. But patients who are without government or private medical coverage are subject to them. The new information should help those patients decide where to get care, he said.
There are vast disparities nationally. The average charges for joint replacement range from about $5,300 at an Ada, Okla., hospital to $223,000 in Monterey Park, Calif.
It’s not just national or even regional geography. Hospitals within the same city also vary wildly. In Jackson, Miss., average inpatient charges for services that may be provided to treat heart failure range from $9,000 to $51,000, the Department of Health and Human Services said.
Hospitals in northeast Indiana also showed some disparity in charges for the most common procedures.
DeKalb Health, for example, charged far less than hospitals in Fort Wayne in many categories. The average covered charge for treatment of a nutritional disorder at DeKalb Health is about $10,700, while it can cost up to $19,770 at Parkview.
Still, that may lend credence to the contention that since larger medical centers usually offer more, costs will be higher.
Hospitals usually receive less money than they charge, however. Their charges are akin to a car dealership’s list price. Most patients won’t be hit with these bills, because they are paid by their private insurance, Medicare or Medicaid at lower rates. Insurance companies routinely negotiate discounted payments with hospitals.
These charges really don’t have a direct relationship with the price for the average person, said Chapin White of the nonprofit Center for Studying Health System Change. I think the point is to shame hospitals.
The Associated Press contributed to this story.