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Recently Released Hospital Data Shows Erratic Pricing Statewide

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The New York State Health Department just posted on its website an expansive data fact sheet on hospital costs in the state, the New York Times reported on Monday December 9. The Times explained that the information was released  was done so in an effort to be more transparent about the pricing of health care.

As part of this endeavor,  “the state is naming hospitals and listing their median charges and costs for 1,400 conditions and procedures from 2009 to 2011. In 2011, prices ranged from the $8 bill at Benedictine Hospital in Kingston, N.Y., for treating a case of gastritis (cost: $2), to a $2.8 million charge for a blood disorder case at University Hospital of Brooklyn that cost it $918,462,” the Times reported.

The release of the database was done so over the objections of hospital trade groups. The trade groups opposed releasing the information because they contend it will confuse medical consumers and laymen, arguing that consumers don’t really pay attention to the sticker price of medical care to begin with.

The Times observed that a cursory database search for common medical procedures yielded various prices, from “startling bargains and enormous markups.” For example, the least expensive knee joint replacement surgery in the state, according to the database, would be A.O. Fox Hospital, which is in Oneonta. The Times reported that the median charge for the procedure was $1,376 and the median cost to the hospital was as little as  $1,057.

The next lowest price in the Times search of the database is in fact quite a quantum leap in price, from $1,376 at A.O. Fox Hospital all the way up to $12,661 by Kings County Hospital Center in Brooklyn. And this is for the next lowest price in a medical procedure. At Kings County, “where 21 cases coded the same way cost the hospital only a little less — $12,476. In contrast, the median cost of the same operation was reported as only $11,180 at Vassar Brothers Medical Center in Poughkeepsie, but it charged four times more: a median of $51,897 for its 12 cases in 2011,” according to the Times.

This is of little concern to an insured patient, as insurance companies negotiate fees with hospitals that are lower than the billed charges. Unfortunately for the uninsured patients, however, they are stuck with the brunt of the bill.

A spokeswoman for Vassar Brothers, which is part of Health Quest, disputed the relevance of the charges listed by the state.

“The median charge is never what we charge our patients,” Sylvia Murphy told the Times in repudiation of the released data. “It’s more like a management tool. It’s just a number we have in our system.” The release of the data has caused concern, she added, “because it’s very confusing and it doesn’t show the full picture.”

The Cuomo administration released the data comes following a series of Times articles that covered the difficulty navigating the nationwide healthcare pricing and the apparent arbitrary randomness of such pricing, along with the well-documented pattern of overcharging, which the released data in fact supports. The Cuomo administration theorized that more transparency, as offered in the database, “could help consumers shop around for more reasonable care.”

Also in the Times report was the case of childbirth. It is one of the most common causes of hospital admissions annually. And here again the database showed severe and erratic variations in  “cost, markups and charges. A. O. Fox again seems like a bargain, the rare hospital that charged less, on average, for its 140 vaginal deliveries with minor severity than its reported median cost — $1,998 versus $2,603,” the Times reported, adding that “Its administrators did not respond Monday to messages asking how it held down costs and prices.”

On the contrary, the Times investigation showed that the Westchester Medical Center in Valhalla documented 183 deliveries that were coded the same way and cost $6,692 but were charged at $22,413. The Times lists this as one of the most costly such cases in the state.

David Billig, a spokesman for Westchester Medical, Told the Times that the comparison was unfair. “As the region’s only tertiary and quaternary care center, Westchester Medical Center cares for the region’s sickest and most critically ill patients,” he said in an email. “For instance, we do only high-risk births.”

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