At CMS.gov., the Centers for Medicare and Medicaid Services released data that supposedly is everything you ever want to know about the prices being charged by regional Medical Centers throughout the US for common diagnoses and treatments.
As part of the Obama administration’s work to make our health care system more affordable and accountable, data are being released that show significant variation across the country and within communities in what hospitals charge for common inpatient services.
The data provided here include hospital-specific charges for the more than 3,000 U.S. hospitals that receive Medicare Inpatient Prospective Payment System (IPPS) payments for the top 100 most frequently billed discharges, paid under Medicare based on a rate per discharge using the Medicare Severity Diagnosis Related Group (MS-DRG) for Fiscal Year (FY) 2011.From The Huffington Post came the headline "Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences" - followed by the lede:
When a patient arrives at Bayonne Hospital Center in New Jersey requiring treatment for the respiratory ailment known as COPD, or chronic obstructive pulmonary disease, she faces an official price tag of $99,690.
Less than 30 miles away in the Bronx, N.Y., the Lincoln Medical and Mental Health Center charges only $7,044 for the same treatment, according to a massive federal database of national health care costs made public on Wednesday.Well, the HuffPo got a bit carried away since few hospitals truly know what their procedures really cost. Hospital accounting, you see, is a world of cost allocations - also known in the number-crunching trade as :the "Accountants Full Employment Act." Allocations mean spreading indirect and institutional costs back to any item that can be billed to a patient and/or insurance company. The Fort Wayne Journal Gazette calls this practice "cost shifting" which is justified to recover the cost of running emergency services and getting paid for treating the uninsured.
The other information revealed in the CMS data is the average reimbursements actually made by the government. In the case of the Bayonne Hospital Center, the payment was only $5,690. Medicare payments for all procedures to all hospitals represents only 27% of claim amounts submitted. The same discounting happens with private insurance based upon an agreement between the hospitals and the insurance carriers and between employers and insurance claim processors. Brian Tabor, vice president of the Indiana Hospital Association, tells us to beware of the incomplete information provided.
“The charges are just an artifact of the system we have,” he said. “It’s just a sticker price. The true price is what’s been negotiated with your insurance carrier.”All this hullabaloo is a waste of time and a pointless campaign to beat-up on medical providers about excess costs instead of tackling the real problems. Long before Obamacare (soon to be single payer) healthcare, rising costs had to be attacked at the source of the problem. Third-party settlement of healthcare has been unsatisfactory as the provider/insurer cabal has been free to collect whatever it chooses from patients (and their employers) through insurance premiums. We do not use third-parties to negotiate other major purchases so we need to return to the patient/provider transactions of the past. Those wishing to insure against catastrophic healthcare losses can do so by dealing directly with the insurance carrier - but payment must come from the patient. To add insult to injury, another free rider, called various names such as HMO or PPO or whatever, is also sucking-up patient payments.
Obviously, more fakery from CMO and government control-freaks needs to stop and Obamacare needs to be repealed - NOW! Regulation is killing businesses and the healthcare industry is spending billions to collect data required by government goons. Hospital administration costs have become ginormous.