Difficult to compare new hospital price lists

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Capital Region hospitals have disclosed lists of tens of thousands of prices for procedures and drugs they provide, giving patients a glimpse of the cost differences between the various facilities.

It may not be a very useful tool for shopping around, however.  Anyone with insurance will pay less than the posted prices, and differences in terminology used by each hospital make comparison between hospitals difficult.

Disclosure of the menu of services and prices, known in the industry as a chargemaster, was mandated effective Jan. 1 by federal regulators. But the requirement is only that the list be complete, not that it be compiled in a standard format.

Not surprisingly, Capital Region hospitals have taken the mandate in various directions:

• Albany Medical Center and its affiliate Saratoga Hospital went to one extreme, each posting long and short schedules that total a whopping 60,202 lines.
• At the other extreme, the list for St. Mary’s Healthcare in Amsterdam was posted by its corporate parent, St. Louis-based Ascension, and is much shorter.
• Ellis Medicine in Schenectady offers a downloadable database totaling 25,902 items as well as an easier-to-read/harder-to-search version on its website.
• Cobleskill Regional Hospital has a relatively short list of procedure prices, as might be expected for a hospital its size, but it also has a separate list of drug prices that’s nearly as long.

Matthew Cooper, vice president of finance at Albany Medical Center, said Albany Med decided to go all out to be sure it complied with all regulations. That’s a main list of 44,149 items and a shorter list of 702 items listed by Medicare group code. Compiling it all was a minimal effort in the digital era, but deciding what to compile and how to present it took some time and thought, he said.

How Useful?

“I would imagine it has limited use for the consumer,” Cooper said. “I would treat the 44,000-item list as a starting point for really cleaning up the process in the future.”

There’s multiple reasons for this:

• Different hospitals use different terminology for services and present it differently on their lists.
• Some patients will need additional care that will boost the cost of the procedure, while others may need less care at lesser cost.
• Almost all patients are covered by some form of insurance; each insurer negotiates a different charge for a given procedure; each insurer has dozens of plans that pass varying amounts of that cost on to the patient.
• The few patients who aren’t covered by insurance are often eligible for free or reduced-price charitable care.

Depending on the patient’s circumstances, there are dozens or even hundreds of actual prices for getting a broken arm fixed at a given hospital, for example, and none of them is going to be shown on that hospital’s chargemaster list.

Albany-based health insurer CDPHP said it has dozens of small-group plans and hundreds of large-group plans, each with its own cost structure. And each of those cost structures may contain its own variables.

“So it’s huge,” CDPHP spokeswoman Ali Skinner said.

CDPHP considers the newly published price lists to be useful to consumers not for estimating out-of-pocket costs but for understanding the high costs that go into high health care insurance premiums, Skinner said.

“It’s a step in the right direction from a transparency perspective,” Skinner said, noting that 34 cents of every health care dollar spent goes to hospitals.

There are some huge numbers in the lists.

The leukemia/lymphoma drug alemtuzumab runs $79,000 at Ellis Medicine. A case of septicemia or severe sepsis is listed at $176,530 at Saratoga Hospital. Care for a premature baby with severe respiratory problems can top $400,000 at Albany Med.

Cooper of Albany Med noted that infrastructure costs are higher at hospitals than at non-hospital treatment facilities. He said  costs are higher still at a major hospital such as Albany Med than at a small regional hospital that’s not paying for the equipment and skills needed to provide advanced care and train new doctors.

Schenectady-based Ellis Medicine’s list stretches to 25,902 items. Comparing its price list for upper-arm fractures to other area hospitals is a good illustration of the shortcomings of the new federal rule:

• Treating a fracture of the humerus (that’s the bone in the upper arm) will run exactly $10,327.50 in the Ellis Emergency Department … or $3,164 or $13,571 or $24,849 in a clinical setting. No details are offered on what factors determine which sum is charged.
• Albany Med’s price list contains 21 separate lines involving the humerus, from $79 (X-ray) to $650 (“treat fracture”) to $10,726.50 (“tissue humerus proximal special”).
• St. Peter’s Hospital lists only four humerus charges, all of them involving X-rays ($79 to $527). If you’re searching to see how much it will cost to fix your broken humerus at St. Peter’s, you won’t find it on the list under “humerus.”
• Saratoga Hospital lists only imaging of the humerus ($504) and CL TX HUMERUS FX W/MANIP ($1,894).

Marc Mesick, vice president and chief financial officer of Ellis Medicine, called the new federal rule a “good first step” that is limited in the information it provides.

“I think it’s good in that it does advance transparency,” he said. “The benefit is a little bit nuanced; it’s not as straightforward as you might expect or hope.”

Ellis has contractually negotiated prices with about two dozen commercial insurers, and each of those has variations such as the ones CDPHP described. “Nobody gets paid the same for the same procedure, generally speaking,” Mesick said.

All told, factoring in Medicare and Medicaid, 98 percent of Ellis patients are covered by some form of reimbursement that cuts the price listed on the chargemaster. 

Only 2 percent of patients are subject to the actual price list, but many people among that 2 percent are eligible for free or reduced-price charity care because their income is not more than 300 percent of the federal poverty level. 

For the tiny remainder, the price list is in effect, but there is a significant discount for uninsured non-charity patients who pay promptly.

In this era of high-deductible health insurance, an increasing number of patients do shop for the best price, Mesick said. Shopping around may not be an option for that traumatic humerus fracture, which needs prompt attention at the best or nearest facility, but it can be a very attractive option for an elective procedure such as a hip replacement, which can be scheduled months in advance.

A better price-shopping tool than the newly published chargemaster list is Ellis Medicine’s call center, Mesick said. Most hospitals have a way of providing verbal cost estimates that are more detailed, personalized and accurate than their chargemaster list could ever be, he said. 

Ellis also has the Charge Estimator on its website, which provides an average cost and average bill for a range of treatments. Inpatient treatment at Ellis for kidney failure, for example, runs patients an average of $4,589.67, or $6,485.23 with complications, or $8,146.79 with major complications, according to the Cost Estimator. (Total procedure costs average $13,641.61, $22,885.50 and $33,063.50, respectively.)

Meanwhile, the New York state Department of Health has been busy assembling its own searchable database of medical costs, broken down by region. A partial list is now online at NYS Health Connector. 

One example from the Capital Region: Implantation of a cardiac defibrillator and heart assist device had a 2016 median cost of $56,584 at Albany Med, $47,823 at Ellis and $30,747 at St. Peter’s.

There’s not much savings to be had nearby:

• In the neighboring Mohawk Valley, the options are limited to two hospitals in Cooperstown and Utica, at $45,272 and $42,553, respectively.
• A longer drive west to Syracuse would get you to St. Joseph’s, where the median price was only $20,987 in 2016.
• The long drive north to Plattsburgh yields no similar savings — median 2016 price at Champlain Valley Physicians Hospital in Plattsburgh was $51,659.
• Closer to home, Glens Falls Hospital had only one such procedure in 2016, so the low price ($17,750) is not statistically meaningful.

Cristina Batt, vice president for federal affairs for the Healthcare Association of New York State, said HANYS is hoping there’s a revision of the hospital price disclosure rule implemented Tuesday by the Centers for Medicare & Medicaid Services.

“What a patient really wants to know at the end of the day is what they’re going to pay,” she said — and the new rule doesn’t provide that information. 

The new rule provides more information but not better information, she said.

However, Batt said greater price transparency is an issue with bipartisan support in Congress. Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said in late November that the Trump administration also supports the inititiatve. It has implemented disclosure requirements with drug prices, she noted, and CMS has now rolled out its Procedure Price Lookup tool online at Medicare.gov.

So Batt is optimistic there will be a better version of the chargemaster disclosure rule.

“I think the question is how and when,” she said.

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