WRAL Investigates

New hospital transparency rules show charges vary widely

Posted November 11, 2013

— North Carolina patients will soon have more access to medical costs than ever, thanks to a state law requiring hospitals to post their charges. Medicare is also releasing charges for the top 100 procedures at 3,000 facilities across the nation, giving patients another way to research costs.

The WRAL Investigates team compared the various costs and procedures and found that charges vary widely among North Carolina’s hospitals. Many variables, such as length of stay and drugs that are prescribed, can be factors, but WRAL found that which supplies doctors choose to use can often affect the bottom line the most.

WRAL Investigates Medical procedure costs & hospital responses

In health care, it can be hard to compare apples to apples – or knees to knees in Phyllis Crane’s and Elizabeth Thomas’ cases. They both recently had similar surgeries for total knee replacement with wildly different hospital charges.

The statement for Crane: $75,000 at Rex Hospital in Raleigh. The statement for Thomas: $28,000 at FirstHealth of the Carolinas in Pinehurst. Both women’s knees contain titanium, and both surgeries were without complications. Thomas’ titanium knee was listed at $15,000 at FirstHealth, and Crane’s was $52,000 at Rex.

When looking at the average charge for this type of surgery at both facilities, there is also a big gap. The average at Rex for "joint replacement of the lower extremities," which includes hip and knee replacement, is $54,000. The average charge at FirstHealth is $34,000.

The WRAL Investigates team showed Rex Hospital the medical statements for both women, which were very similar. A spokesman said he could not speak about specific cases.

“Health care finances are incredibly complicated,” the Rex spokesman said in a statement. “Two patients having knee replacement surgeries might spend different amounts of time in the operating room; receive vastly different types of implants, anesthesia, drugs and other medical supplies; and require different types and amounts of personalized therapies during their hospital stay. Those varying factors can lead to a wide range of charges.”

The WRAL Investigates team looked at the average charge for knee replacements without complications and found a nearly $60,000 difference in cost at hospitals across the state. The highest average cost for a knee replacement is at Martin General Hospital in Williamston at $81,000. Halifax Regional Medical Center in Roanoke Rapids had the lowest average at just less than $24,000.

While the information shines a light on medical costs, the North Carolina Hospital Association cautions against using only this information to make a health care choice.

“Selecting a hospital based on price or charges is an inadequate amount of study for anyone,” said Don Dalton, NCHA's vice president of public relations. “First of all, what hospitals have posted does not tell any individual what they will pay.”

Dalton says charges are just a starting point. “Charges tend to be what hospitals use to start the negotiations with insurance companies,” he said.

In a statement Monday, a Harnett Health spokeswoman pointed out that other factors, including insurance coverage and a patient's personal doctor could play into the choice of where to get treated.

"Harnett Health's charges for each service provided, on average, are below the market in just about every type of service," Meredith Blalock told WRAL Investigates. "Also, the value a hospital brings to its community is a consideration."

The WRAL Investigates team looked beyond the charges to see what other data is available. Medicare also scores hospitals on quality of care and patient surveys. WRAL gathered total performance scores for every hospital in the state that submitted information and divided the performance total into the price of certain procedures to find out which hospitals offer the best care for the charge, according to Medicare data.

For chest pains, Granville Health System came out on top locally, with every performance point costing the patient $114. That’s compared to UNC Hospitals at $159, Duke University Hospital at $218, WakeMed Cary Hospital at $300 and, on the high end, Nash General Hospital at $424.

In 23 of the 24 most common procedures performed at Granville Medical Center, it has the best price and performance ratio in this area. In the end, however, where a patient lives and what his or her insurance covers drives the health care decisions.

In Crane’s and Thomas’ cases, neither of them paid out of pocket because their insurance covered their costs. However, those higher prices can impact consumers in the form of higher premium hikes. Dalton says he believes more transparency will mean fewer wild swings in price.

“I think the first hope is that transparency creates more uniformity, more close comparisons and less variability in the cost,” he said.

Thomas says that will be good for shoppers.

“One facility can look at another and say, ‘We are charging $28,000, and they are charging $75,000. What’s going on?’” she said.

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  • SMAPAEA Nov 13, 2013

    The fact that the hospitals have to negotiate with insurance companies, and have to adjust prices instead of having a flat amount per service for everyone, is the reason healthcare is broken in this country. Healing people should not be about making money.

  • BGJ Nov 13, 2013

    It's good to know the billed charges but not very relevant to making decisions because it's the allowed amount that matters. Unfortunately, the allowed amount is a contracted amount between the provider and the insurance company and not publicly available. BCBSNC has a cost estimator tool that you can use as a member and will give you a better indication of your actual out of pocket cost.

  • peace2u Nov 13, 2013

    The medical lobby is the 3rd most powerful lobby in the U.S. And they keep the prices high. I recently broke my wrist and had to have a small titanium plate put in to hold the bones in place. On the hospital bill the cost of the plate was &10,000. That's what I paid for my car!!

  • cbuckyoung Nov 13, 2013

    Thank-you to the North Carolina Republican General Assembly and Republican Governor Pat McCrory for giving us a real tool to help us chose the right health care provider as opposed to the monumental failure that is Obamacare.
    This measure clearly shows the difference between the common sense Republican approach to make things understandable and transparent and the Democratic view of government as God.

  • aspenstreet1717 Nov 13, 2013

    A welcome very small step in the right direction. Sadly all of the proposals to get costs down were lobbied out of the ACA. Healthcare is basically a government enforced/protected monopoly.

  • paul2345 Nov 13, 2013

    As a former hospital employee, I had decade-old cost knowledge when I arrived at a local ER for attention to a damaged arm. Asking the staff not to give me medications, taking only an H&H instead of a CBC to determine how much blood loss I experienced, begging to not be wheeled into an OR for the necessary sewing -- it was all to avoid a bill I couldn't afford as an uninsured worker. The nurses laughed at me at first, but when I persisted in asking how much that test, that gauze, that pill cost, they had no idea. It was just SOP to them. The pain of paying a $28k bill over the next few years, vs. the $14k I ultimately paid, would have been far worse than the pain alleviated by that $18 tylenol pill (a 50 count bottle at the drug store across the street was 1/3 that -- I offered to pay if one of them would run across to get the bottle -- they laughed). Most of the staff (and docs) have no clue, and most of the patients have no idea how expensive a hospital is to maintain.

  • SirWired Nov 12, 2013

    I was in Duke Hospital last year for some minor surgery. During recovery, I was given 1L of Lactated Ringer's Solution. (This is a common rehydration solution and is also used to just keep the IV running.) When I give this to my cat to help out with her kidney problems, it costs me $1.50/L from Rite Aid, along with a set of IV tubing for $1.10 and a $0.07 needle that I buy online. This comes to a grand total of $2.67, when I buy the things as a retail customer.

    What was the "rack rate" that Duke charged? $112. I understand they have to pay somebody to order it, set it up, and administer it, but not over $100 worth of work.

    Their argument is that "nobody pays" these rates, but in that case, why ever put them to paper? If it's just so you feel you feel better about your insurance or to make you think you are getting a break if you self-pay, then these prices are deceptive and should be ille

  • davidgnews Nov 12, 2013

    How do you explain an EOB where the charge is $700 but the amount they agree to accept is $50? That's NOT an exaggeration.

    That's because no matter how noble, lofty, or esoteric, most 'professions' have an incredible BS factor riding behind them, just in staging alone.

  • simplelogic Nov 12, 2013

    "I've never heard of a hospital writing off the difference between billed and allowed charges. Do you have a site where that is cited?"

    No, I have the word of a close friend who used to be a doctor's bookkeeper and talked about the two sets of books they kept. I also have my own experience as an uninsured student who had to pay that ridiculously inflated amount. How do you explain an EOB where the charge is $700 but the amount they agree to accept is $50? That's NOT an exaggeration.

  • tdouble232323 Nov 12, 2013

    Would sure like to know why 10 NC Dems voted against this bill?

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