Release Of Hospital Charges Reveal Significant Variation In Pric - 47 ABC - Delmarva's Choice

Release Of Hospital Charges Reveal Significant Variation In Price

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WMDT 47 News - New data released by the Centers for Medicare and Medicaid System are causing quite a stir. Hospital charges vary significantly even among hospitals in the same Medicare referral region.

It may be hard to believe, what you pay for inpatient healthcare at one hospital could vary significantly from what you pay at another, just down the road. In the FY 2011, treatment for chest pain averaged around $9,000 at Nanticoke Memorial Hospital in Seaford. But at Bayhealth Kent General Hospital in Dover, it was around $14,000. That's a $5,000 difference.

"Hospitals can set their charges however they want to set their charges. They can price them however they want to price them, and they negotiate a rate with payers. If you don't have health insurance and you don't have a negotiated rate, you're paying whatever the hospital sets their charges at. So there's a lot of variation in who pays what - variation even from one person to the next person in the same hospital," President and CEO of Atlantic General Hospital Michael Franklin said.

Maryland is the only state in the country that has a system in place to try to close that gap. Prices from hospital to hospital still do vary, but the differences aren't as significant. A commission appointed by the governor sets the rates for each hospital.

"We charge all payers the same amount of money. Everyone is paying the same base price within the hospital. If you come to our emergency room with a problem, and whether you have insurance or no insurance or Medicare, you will have the same bill, same price. You will be responsible for that payment as the insurer is paying, so there's no variation at a hospital based upon your specific circumstances," Franklin said.

It's a 40-year-old system designed in part to get doctors to focus on the quality of patient care.

"Price doesn't become an issue for hospitals, and hospitals can focus on other factors for being better. Price does not become a means of competition. Price is basically taken out of the equation when you're dealing with healthcare. You would select where to go to a hospital based upon the quality of care and service in that hospital" Franklin said.

But Franklin says the overall quality of healthcare in the state of Maryland hasn't really improved.

"We're kind of in the middle of where everything is. We haven't proved that our system is any better than anybody else. So why should we have a special system if we're not better than anybody else?" he said.

So while Delaware hospitals continue to set their own costs and negotiate rates with insurance companies, Maryland officials are trying to come up with a more comprehensive plan. They hope this new system will both raise the quality of healthcare and keep the prices low. We're told this new proposal has been presented to the federal government, which reviewed it and provided feedback. But Maryland health officials still need time to improve the plan and hash out the details. We're told the goal is to have the project approved by the federal government within six months.

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