Will Patients Win with Transparent Hospital-Bill Mandates?

If you had a chance to read Steve Brill’s enormous piece on outrageous hospital bills in Time earlier this year, you probably found it an eye-opener.  Speaking before Physicians for a National Health Program meeting in New York last night, Brill said: “The anger is really building.” Brill is making the rounds now, speaking around the country. He put the blame on hospitals, administrative costs, and device salespeople, who reap excessive profits from patients.

Doctors and nurses (who incidentally accounted for much of the audience) are not the culprits in out-of-control prices, he explained repeatedly during his presentation. Not discussed, though, was the fact that some doctors do receive outrageous compensation from hospitals and medical schools. According to Wikipedia, David B. Samadi, MD, Vice Chair of Robotics and Minimally Invasive Surgery, at Mount Sinai School of Medicine in New York, where the meeting was held, received annual compensation in 2010 of $6,389,585. He was the highest paid person at the medical school. The figure was taken from the medical school’s tax return, according to Wikipedia. You have to wonder how many doctors are on academic medical center payrolls, and to what extent, their pay is transferred into your bill. Surely, Mount Sinai is not paying Dr. Samadi as a loss.

Hospital Charge Stories Take Media by Storm

A slew of articles are out today on hospital cost variation in Medicare that coincide with the federal government’s release of prices for the 100 most common inpatient procedures. The hospital costs published today come from the hospitals’ chargemaster.

Washington Post’s May 8 wonkblog reports several stark charge differences. Costs for joint replacement, the most common procedure for Medicare patients, ranged from a low of “$5,304 in Ada, Oklahoma, to $223,373 in Monterey, California, states the WaPo story. In Philadelphia, a simple case of pneumonia without complications cost $124,051 in Philadelphia, compared with $5,093 in Water Valley, Mississippi.

In California, the Los Angeles Times reports similar price differentials, but also points out that since 2006, California hospitals have been required to publish average charges the most common procedures on a state website. Today’s lead story in the New York Times reports that, according to its analysis, hospitals charge about 3 to 5 times more than what Medicare will pay for a given procedure.

Hospital chargemasters are a set of list prices that hospitals use internally, but it’s impossible to see them, unless they are made transparent, Brill explained. “It’s fiction – except it’s not fiction for the people who get billed, who are uninsured or have lousy coverage,” he said. Importantly, he pointed out that at least 60% of personal bankruptcies are attributable to excessive bills. The nation’s teaching hospitals defend higher cost structure. The hospitals claim that higher costs are necessary for teaching and treating sicker and older patients.

Brill and others see price transparency as an opening for reform. Do you think publishing prices like this will help you? Have you been stunned by charges on bills that you have gotten?

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