New hospital transparency rules show charges vary widely
Posted November 11, 2013
Raleigh, N.C. — 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.
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.