Groups Trying to Make Hospital Prices Clear

by Mark Friedman  on Monday, Sep. 16, 2013 12:00 am  

Baptist Health’s CFO Bob Roberts said Baptist helps patients estimate costs.  St. Vincent and other hospitals now use net revenue as their top-line figure.

The nearly $30,000 “list price” charge at National Park Medical Center never reflected the true price of the procedure, Mandy Golleher, a spokeswoman for the hospital, said in an email to Arkansas Business.

“Unfortunately, looking at charge data in isolation does not take into account a full picture of the complex reimbursement environment that we, along with all hospitals, must deal with,” she wrote. “It is important to understand that hospitals only collect a small percentage of our charges, or ‘list prices.’”

She said Medicare, Medicaid and private insurance companies all receive a discount and no one pays full price. Even uninsured patients could receive a 60 percent discount on the list price, Golleher said.

“But even the discounts are not an exact science because each patient is handled on a case-by-case basis,” Golleher said.

Starting a Website

Jeanne Pinder of New York started the website ClearHealthCosts in 2011 to report the prices for different health care procedures in seven metropolitan areas. No cities in Arkansas are currently on the site, but more regions are being added.

Pinder, who is the CEO of ClearHealthCosts, said prices in the same city can vary widely. Hospital charges can fluctuate so much because “it’s an opaque marketplace,” she said.

Pinder said that she thinks transparency in health care is coming because more people will have a reason to pay closer attention to the prices.

“The landscape has changed dramatically,” Pinder said. “The people who are insured often will be either on a high-deductible plan, … [or] in many cases paying 10 or 20 percent of the sticker price.”

Accounting Change

The American Institute of CPAs started moving toward clearer hospital accounting in 2011, said Wolfskill, of the Healthcare Financial Management Association.

The rule change, which took effect in 2012, called for hospitals to use net patient revenue as their top-line figure instead of the gross revenue, which included the billed amounts that “nobody pays,” Wolfskill said.

 

 

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