Monday, May 21, 2012

Wide disparity found in hospital charges for appendicitis. Why?

If you wonder why hospitals are under fire for outrageous and often baffling accounting practices, look no further than a brief paper published last month in Archives of Internal Medicine.
Hospital charges for straightforward appendectomies done for acute appendicitis in California in 2009 were examined with the following inclusion criteria:

  • Patients between the ages of 18 and 59
  • Hospital stays fewer than 4 days
  • Discharged home
For the more than 19,000 records reviewed, the median hospital charge was $33,611 with a low of $1,529 and a high of $182,955. Not included in the article but mentioned in news stories about the paper were more details about the care of the two patients at the extremes of charges.

From the Huffington Post: “The costliest bill, totaling $182,955, involved a woman who also had cancer. She was treated at a hospital in California's Silicon Valley. Her bill didn't show any cancer-related treatment. The smallest bill, $1,529, involved a patient who had her appendix removed in rural Northern California. Otherwise, the cases were similar: Both patients were hospitalized for one day, had minimally invasive surgery, and had similar numbers of procedures and tests on their bills.”

A California Healthline story about this clarifies the issue. It said,“Dave Glyer, CFO for Community Memorial Health System, said that the study ‘assumed that hospital charges matter when they don't,’ making it ‘completely off base.’ He said that insured patients pay rates negotiated by health insurers and that certain uninsured patients are aided by assistance programs.”

It’s all clear to me now. Hospital charges don’t matter.

What if you have no insurance and are not one of the “certain uninsured patients” who are aided by assistance programs? You are on the hook for the entire bill unless you can negotiate too.

What’s not clear is how the median hospital charge for a simple procedure such as an appendectomy can be $36,611 with such a large variation. 

May we see an itemized bill for the $182,955 please?


Doc99 said...

If you think healthcare is expensive now, wait until it's free. - PJ O'Rourke

Skeptical Scalpel said...

That's a great comment and no doubt correct. Thanks.

Robert Merkel said...

Doc99, contra Mr. O'Rourke, the international evidence suggests that free care is indeed cheaper.

Skeptical Scalpel said...

Robert, thanks for commenting. Is it cheaper because it's free, or are there other factors?

Robert Merkel said...

Sorry for the brevity. My real point is that, internationally, governments buy healthcare cheaper than individuals or insurance companies do.

This is for a variety of reasons, including using their monopoly buying power to push down doctor's incomes below what they are in the USA.

Huhet said...

I wonder what the mean collections were. Is there any info on that?

Skeptical Scalpel said...

There was no information on what the hospitals were actually reimbursed. I agree that would be interesting.

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