Hopefully, you have had a chance to take a peek at the Federal Database.
If not, here's the link again:
So what made it possible that two hospitals in such close proximity would set prices as differently as Bayonne Hospital Center in New Jersey and the Lincoln Medical and Mental Health Center in New York or the Mayo Clinic in Scottsdale, AZ and Banner Boswell in Sun City, Arizona?
"The charge masters are totally irrational," Robert Laszewski, a former health insurance company executive who consults for health care companies as president of Alexandria, Va.-based Health Policy and Strategy Associates, wrote in an email to The Huffington Post.
Hospitals used to base prices on average health care costs and on the need for profit that would, among other things, enable them to make investments and improvements in their facilities, Laszewski explained.
"They became the baseline from which the hospitals started," he wrote.
Prices have just continued growing over decades to the point where there is no real justification for them, according to Laszewski: "Over the years, the charge masters have become more and more disconnected from reality."
Remember that these charges are the prices hospitals establish "themselves" for the services they provide.
There has never been a set national costing structure for hospital services and never a way for people to use a competitive strategy to decide where they should have their services performed.
Unfortunately, the majority of the U.S. population makes their decisions on which hospital to go to for services based on three factors:
1. Where their primary doctor "resides" or performs most often
2. Proximity of the hospital to their home
3. What type of insurance the hospital / doctor / staff will honor
Because of these factors, hospital financial staffs have known that they had virtually free rein to increase pricing on services without any substantial loss of business.
Let's face it, if you have spent any time in a hospital you know that the billing for services is about as confusing as it can get and the majority of us poor baby boomers rely on our insurance companies to fight the financial battles for us.
That translates into higher premiums for people with insurance.
If you have been one of the unfortunate uninsured people in the U.S. you have been expected to pay the full list price for your services, or if you are lucky or a good negotiator, a discount from that number, which tends to mean you paid more than anyone else.
As Robert Laszewski states....."The biggest irony of the U.S. health care system is that only the uninsured -- often people who don't have a lot of money -- are the only ones the hospital expects to pay these incredibly inflated list prices!"
"When a hospital doesn't get paid as much as it wants from one source, it tries to make up the difference in other ways, such as billing so-called self-pay patients -- almost always the uninsured -- for the full list price of a service" said Robert Huckman, a health care expert at Harvard Business School.
"Even when hospitals agree to huge discounts for patients who can't pay the bill, those discounts are taken from inflated prices much higher than those the government or private insurance companies pay", he said.
As Robert Laszewski sums up in his article in the Huffington Post: "The charge master is complete nonsense that really doesn't matter."
Hospitals also inflate charges to raise money for things that aren't related to treatments, said former Sen. David Durenberger (R-Minn.), who is senior health policy fellow at the University of St. Thomas in Minneapolis.
"The biggest factor by far, in my experience, is what they are trying to cross-subsidize," he said.
Hospitals will increase charges to finance things like technology upgrades and education and research and to compensate for their operational deficiencies, Durenberger said.
"It would be hard for a hospital going forward, unless there's a justified reason, to be able to preserve such a large profit margin over what its otherwise equal competitors charge," states Robert Huckman our friendly health care expert at Harvard Business School.
Huckman said. "If someone knows the amount that even the most advantaged payer reimburses a hospital for a particular service and they can take that in with their own bill, I think that gives a pretty powerful opportunity for that customer to interact with the organization and say, 'Why are my costs so different?'"
1. I recommend you take a look at the database, especially at those hospitals in your area and see who charges the most for common procedures.
Although the amount of data is large and the excel process of moving the data around may seem cumbersome, if you are not completely computer savvy, if you just concentrate on a specific hospital service and on your specific geographic area it makes the information more user friendly
Like in my "Arizona" example yesterday for the COPD services, it took me less than 5 minutes to sort through the information and arrange the hospital charges according to high/low costs.
2. Use this information before you schedule your surgeries / appointments.
3. Call the hospitals and let them know up front that you have this pricing information in front of you.
4. Call your insurance companies to let them know as well.
5. Talk with your primary care physician and get his advice on how to reduce your costs. If he won't help you then I would make a change in doctors.
6. Boycott those hospitals and facilities that are the highest priced.
At least we have a tool now to begin to battle this blatant "pricing gouging" from the healthcare system.
Don't be bashful..........it's "your" money they are after.
Spend a few minutes researching medical "watchdog" websites that are growing in popularity like "HealthTap.com", "Citizen.org" or "HealthNewsReview.org".
I have made it easy for you here......Just left click on the links I created to check them out.
The technology start-up community is gaining momentum in clarifying what loopholes exist in our national healthcare system and have begun to generate their own national rankings of medical quality.
Healthtap, for instance, allows patients to anonymously seek free public medical advice, which is rated up or down by a community of doctors who are active on its forums.
The more likes a doctor gets, the better he is viewed among his peers.
Interesting concept, huh?
Make sure to utilize the resources available to us that can help us save money on our health care.
If you were waiting with "baited breath" for my second edition of "Fervid Fridays" I apologize for this preemption but I wanted to finish off my research on hospital "inside pricing" before moving on.
I hope you don't mind.
My next blog will be "Fervid Friday's" but just not on Friday.
Thanks for joining me..................................................................