Reflecting findings of recent nationwide survey, average area hospital charges vary greatly
by Patrick McCreless
Jun 02, 2013 | 3875 views |  0 comments | 40 40 recommendations | email to a friend | print
The bill for a major joint replacement at Anniston's Regional Medical Center could run as high as $44,000. At the Gadsden Regional Medical Center just 30 minutes away, the same procedure could cost $92,000.

Meanwhile, eight blocks up Christine Avenue from RMC at Stringfellow Memorial Hospital, the price tag for the same surgery could amount to more than $141,000 .

The U.S. Department of Health and Human Services recently released the average prices hospitals across the country charged Medicare for various medical procedures in 2011. The statistics show hundreds of examples of price disparity among hospitals not just in different states, but among those in the same communities. The federal government's goal is to create transparency regarding medical prices, allowing consumers to price shop and theoretically drive healthcare costs down as hospitals are forced to compete.

However, health industry experts and local hospital administrators argue as to the effectiveness of the plan — with some saying the charges are not necessarily what people actually pay for care, making price shopping irrelevant.

"Those charges have no resemblance of what anything actually costs," said Alwyn Cassil, spokeswoman for the Center for Studying Health System Change, a Washington-based nonpartisan health policy research group. "These hospital charges are not really useful to anyone."

Cassil said while hospitals’ charges can get very expensive for various procedures, patients rarely pay the full amount, depending on their insurance providers.

"An insurer is going to negotiate the price you pay," Cassil said. "Many private plans provide tools to provide what the real out-of-pocket prices are going to be."

Georges Benjamin, executive director of the American Public Health Association, a Washington D.C.-based organization made up of public health professionals, disagreed with Cassil, saying the cost figures could be beneficial to some patients.

"Those are indeed the prices many of the uninsured get charged because they don't get the benefit of a negotiated discount," Benjamin said. "But with this transparency, there will be more pressure to bring prices down and I think, at the end of the day, people will get a better value."

Cassil said that the release of hospital charges shed light on problems and unfairness in the country's health care system.

"There is a tremendous variation in prices for some services ... that's because some hospitals are able to demand and get relatively high payment rates from private insurers," Cassil said.

Benjamin agreed with Cassil that the hospital charge disparities “are unacceptable."

Bryan McCauley, CEO of Stringfellow Memorial, said hospital charges vary due in part to factors within a community.

"Typically, what hospitals will do is look at income as the cost of living in an area and adjust prices accordingly," McCauley said.

However, a disconnect between what is charged and what is paid exists, McCauley said.

"Even with patients who have no insurance, by no means is that what they pay," McCauley said. "We work with them on price."

David McCormack, CEO of Regional Medical Center, said medical costs also depend on whether the hospital charging them is a profit or nonprofit facility. RMC is a nonprofit while Stringfellow is a for-profit hospital.

"We just have to pay our bills and pay capital costs," McCormack said.

Stringfellow is owned by Florida-based Health Management Associates.

McCauley said that due to the disconnect between charges and actual payments, price shopping is probably not the best way to go when choosing a hospital.

"A better indicator is the quality of the institution and the benefits of your insurance coverage based on agreements they have with the hospital," McCauley said.

McCormack noted that the list might make people think that a hospital that charges more for a particular procedure is doing so because it provides better service than a hospital that charges less.

"That is not the way it works," McCormack said. "The higher prices don't mean it’s better."

Cassil said the government is not trying to push the idea that higher costs mean better quality of care.

"They're trying to help people make more informed choices," Cassil said. "But the reality is, if you are going to be hospitalized, you are just going to blow through your deductible and after that, the insurer will pay what it’s negotiated."

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.
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