Hospitals react to release of price differences
WHEELING – Local residents treated for chronic obstructive pulmonary disorder with major complications/comorbidity at East Ohio Regional Hospital can expect to be billed $17,899, while those who seek treatment at Wheeling Hospital would be billed slightly more than half that amount at $9,997.
The same treatment at Ohio Valley Medical Center would be billed at $15,229, while at Trinity Health Systems of Steubenville the charge would be $13,228, according to the Centers for Medicare and Medicaid.
But local hospital officials say their institutions rarely get paid the full amount shown on their master list of charges for medical procedures. And information released this week by the Centers for Medicare and Medicaid shows those hospitals actually receive an average of $6,400-$6,600 for such COPD treatments.
The report lists the amounts hospitals charge for specific procedures, labeled “average covered charges,” and the corresponding amount they actually receive, labeled “average total payments.” Government officials say by releasing the information, they hope to provide more transparency for the public. They also believe it will allow people to shop around for medical services and compare prices charged at various hospitals for similar procedures.
Examples of compared charges and payments at local medical institutions include:
Lisa Simon, chief financial officer for Ohio Valley Health Services and Education Corp., the parent company for Ohio Valley Medical Center and East Ohio Regional Hospital, said there are a variety of factors that determine her hospitals’ “charge master” or cost list for each procedure. It is updated annually. One example that impacts a charge, she said, is that all of the emergency room physicians are board certified.
“That means you should be getting a higher quality of care,” Simon said.
She noted, however, what the hospitals charge and what they actually receive in Medicare and Medicaid payments is significantly different. In those cases, the hospitals rarely receive the charged amount. Insurance companies also negotiate prices.
“Whether you’re a hospital, a doctor or a dentist, they rarely get paid 100 percent of the charges,” Simon said, adding OVMC also has a high percentage of charity care or patients that cannot afford to pay the “charge master” prices.
“OVMC exceeds the state average of uncompensated care for patients given quality care, too,” Simon said. “We are a not-for-profit. Our mission is that we are in the business of caring for people.”
She added when comparing EORH and OVMC’s charges, OVMC’s typically are higher because it is a teaching hospital, meaning it receives more Medicare and Medicaid money because it employs medical interns and residents. EORH does not.
Wheeling Hospital spokesman Gregg Warren said hospitals such as his set their rates based on what will give them a reasonable profit margin and cover their costs.
Both Simon and Warren said those not using Medicare or Medicaid often make up for a hospital’s loss on those patients.
“These government programs pay hospitals significantly less than what it actually costs to care for their patients, and that loss is passed on to patients who have commercial insurance in the form of the aforementioned margin,” Warren said. “In many ways this ‘cost transfer’ can be viewed as a hidden tax whereby the government passes a portion of their obligations under Medicare and Medicaid onto the backs of patients who carry commercial insurance.”
Keith Murdock, Trinity Health Systems of Steubenville spokesman, said his hospital, much like others, calculates its charges based on resources to perform a procedure, such as salaries supplies and equipment.
“The rate at which health care providers are reimbursed is based on several critical factors, including geographical location, the associated wage index, the acuity of patients generally served by the hospital and the cost to provide services,” Murdock said.
“As a faith-based health care provider, Trinity Health System does not turn anyone away, regardless of their ability to pay. For uninsured, underinsured and those patients at or below the poverty level, Trinity greatly discounts charges. In fact, in 2012 alone, Trinity Health System provided more than $24 million in charity and uncompensated care. Medicare and Medicaid patients account for 65 percent of Trinity’s total patient revenue,” Murdock added.
Both Simon and Murdock said their hospitals provide discounts to help uninsured and underinsured patients. Simon also pointed out while various hospitals’ charges may differ significantly, what Medicare and Medicaid actually pay out is similar for every hospital.