Nationwide Data on Hospital Price and Comparability-Are You Getting Ripped Off By Your Hospital?

 

Hospital Price and Comparability-What Private Employers Pay VS Medicare

One of the crucial elements for making informed decisions on any product is understanding price and comparability for services and this is also true for healthcare. The recent Rand Report (Christopher M. Whaley, 2020) illuminated huge pricing disparities for hospitals across the country by evaluating what private employers pay versus government reimbursements. The State of Maryland has state-controlled hospital prices (and some of the lowest hospital costs in the nation) and is therefore not included in the survey. I previously published an article on how Maryland’s state hospital pricing works. (Winter R. , 2014) The Rand Report analyzed 3000 hospitals in 49 states to assess relative value for similar services paid by private employer plans versus Medicare, which is the largest government funded plan in the US. Quality rankings were based on findings from the Centers for Medicare and Medicaid Hospital-Compare data, Leapfrog Hospital Survey, and HRIS patient mix data then scaled on a 1-5, with 1 being the lowest ranking.

Using data from 2016 to 2018 for private employers, the Centers for Medicare and Medicaid (CMS), and state agency data on hospital claims, here are the key findings from the report: (Christopher M. Whaley, 2020)

ü     Rand found little relationship between hospital quality rankings and price disparity. In other words, hospitals that charge less can also deliver high quality results and these are referred to as high value hospitals. Conversely hospitals that charge more don’t necessarily have better quality.

ü      There is a huge variance in hospital prices by state, with Arkansas, Michigan, and Rhode Island boasting relative value prices within 200% of Medicare reimbursement levels. Meanwhile, Florida, West Virginia, and South Carolina had relative value prices nearly 350% of Medicare reimbursement levels. So private employer plans in the latter could be paying 150% more for the same services compared to those in AK, MI, or RI.

Using the recently published Rand Report of hospital pricing for private payments versus government funded CMS payments, I extracted the zip file and analyzed data for the combined cost for inpatient and outpatient services by state, health system, and individual hospital. Here are the results for the most expensive and least expensive hospitals both in Washington and nationwide.

Washington

These tables show the relationship between the combined price for inpatient and outpatient services charged to private insurers (and self-insured plans), versus what the Centers for Medicare and Medicaid paid. Yakima Valley Memorial Hospital is one of the best deals in the state with a combined price for inpatient and outpatient services of 170% for private insurance compared to what Medicare/Medicare (CMS) pays.

Least Expensive Hospitals

Facility Name	Location	Quality Ranking 5 is highest	Health System	Combined Price vs CMS
Yakima Valley Memorial Hospital	Yakima	4	Virginia Mason Health System	170% of CMS
Swedish Hospital Issaquah	Issaquah	4	Providence St. Joseph	176% of CMS
Evergreen Hospital	Kirkland	5	Peace Health	189% of CMS
UW Medicine-Northwest Hospital	Seattle	4	UW Medicine	207% of CMS
Overlake Hospital	Bellevue	4	Peace Health	215% of CMS

Most Expensive Hospitals

The most expensive hospital in the state is Tacoma General Hospital-Allenmore, part of the Multicare  System charging 330% of the CMS rate of reimbursement for privately insured plans. Though Harborview Medical Center scored a 312% combined price vs CMS, since it is a critical access hospital and trauma center for multiple states and therefor has more intensive patient needs, I have removed it from the list.

Facility Name	Location	Quality Ranking 5 is highest	Health System	Combined Price vs CMS Reimbursement
Tacoma General-Allenmore	Tacoma	2	Multicare	334% of CMS
Good Samaritan Puyallup	Puyallup	2	Multicare	330% of CMS
Swedish Providence	Seattle	5	Providence St. Joseph	307% of CMS
Harrison Medical Center	Bremerton	3	Catholic Health Initiatives	304% of CMS
St. Joseph Medical Center-Bellingham	Bellingham	4	Peace Health	303% of CMS

 Nationwide Data

10 Best Value Hospitals Rand Report 2020

Here are the 10 least expensive hospitals in the country, based on the relationship of what they charge private employers and what they are paid by CMS for similar services. Kudos to Maine for boasting multiple hospitals on this list of low price and high-quality rankings. This trend was also proven true when I ranked nationwide hospitals in 2011 and found only 1 hospital in the country had a perfect safety score, Penobscot Bay Medical Center in Maine. (Winter R. E., 2012) Of these highly affordable hospitals 90% are nonprofits and 40% are independent community based hospitals.

Facility Name	City	Quality Ranking 5 is highest	Health System	Combined Price vs CMS
Texas Women’s Hospital	Houston, TX	3	HCA Healthcare	48% of CMS
Redington Fairview Hospital	Skowhegan, ME	4	Independent	61% of CMS
Good Samaritan Hospital	Bakersfield, CA	2	Independent	62% of CMS
Women’s Hospital	Baton Rouge, LA	3	Independent	67% of CMS
Sebasticook Valley Hospital	Pittsfield, ME	4	Eastern Maine Healthcare Systems	71% of CMS
Deaconess Women’s Hospital	Newburgh, IN	5	Deaconess Health Systems	75% of CMS
Patients Hospital of Redding	Redding, CA	NA	Adventist Health	80% of CMS
Blue Hill Memorial Hospital	Blue Hill, ME	4	Eastern Maine Health Systems	82% of CMS
Physicians Medical Center	New Albany, IN	5	Independent	83% of CMS
Mount Desert Island Hospital	Bar Harbor, ME	4	Eastern Maine Healthcare Systems	89% of CMS

 10 Worst Value Hospitals Rand Report 2020

Of the most expensive hospitals with the greatest disparity in price charged to private employers versus the CMS reimbursement 70% were for profit companies, with 50% of those run by the behemoth HCA Health. HCA is the company that received the largest fine for healthcare fraud (at the time) for up-charging CMS and bilking government tax payers for billions. (Justice Department-US Government, 2003) Rick Scott, former Governor of Florida and now Senator of Florida was running HCA at that time. (Schultz, 2018) 

Most interesting is Face Book founder and guy-still-trying-to-make-friends, Mark Zuckerberg’s hospital in San Francisco, had the worst quality ranking in the Rand 2020 survey and still managed to charge private employers nearly six times the CMS reimbursement for the same services. These hospital price disparities place a great strain on employers in California, especially with the pressures of the Covid-19 pandemic. It is no wonder that California is exploring establishing its own state-run healthcare plan.

Facility Name	City	Quality Ranking  5 is highest	Health System	Combined Price vs CMS
North Bay Regional Hospital	Fairfield, CA	2	North Bay Healthcare Group	815% of CMS
Fort Walton Beach Medical Center	Fort Walton Beach, FL	2	HCA Healthcare	575% of CMS
Memorial Hospital Modesto	Modesto, CA	2	Sutter Health	572% of CMS
Zuckerberg Memorial Hospital	San Francisco, CA	1	San Francisco Health Network	565% of CMS
Westside Regional Medical Center	Plantation, FL	1	HCA Healthcare	514% of CMS
Colorado Plains Medical Center	Fort Morgan, CO	2	LifePoint Health	508% of CMS
Parkridge Medical Center	Chattanooga, TN	2	HCA Healthcare	505% of CMS
Springs Memorial Hospital	Lancaster, SC	2	Community Health Systems	499% of CMS
Summit Medical Center	Hermitage, TN	2	HCA Healthcare	493% of CMS
Alaska Regional Hospital	Anchorage, AK	5	HCA Healthcare	493% of CMS

 Conclusion

It is obvious that small independent hospitals frequently offer better value with good hospital quality rankings, which reflects on hospital leadership and the fact they are focused exclusively on delivering healthcare to their communities as opposed to creating giant venture capital funds. I personally suggest we have someone from Maine lead US healthcare reform for they have surely figured that out in their home state.

And this is the healthpolicymaven signing off encouraging you not to sign blanket waivers when submitting to healthcare procedures, do indicate that for which you agree and also what you choose to decline.  Healthpolicymaven is a trademark of Roberta E. Winter, in continuous use since 2007. All opinions expressed in this column are independent journalism without industry sponsorship from the healthcare sector.

 References

Christopher M. Whaley, B. B. (2020). Nationwide Evaluation of Health Care Prices Paid by Private Health Plans-Findings From Round 3 of Employer-led Transparency Initiative. Rand Corporation, Santa Monica. doi: https://doi.org/10.7249/RR4394

Justice Department-US Government. (2003, June 26). Largest Healthcare Fraud Case In US History Settled-HCA Investigation Nets 1.7 Billion. US Government Department of Justice. Retrieved September 18, 2020, from ustice.gov/archive/opa/pr/2003/June/03_civ_386.htm#:~:text=(formerly%20known%20as%20Columbia%2FHCA,the%20Justice%20Department%20announced%20today.

Schultz, R. (2018, October 2). Gov. Rick Scott Took Responsibility-No He Took 300 Million. Retrieved September 18, 2020, from https://www.sun-sentinel.com/opinion/fl-op-col-rick-scott-medicare-fraud-20181002-story.html

Winter, R. (2014, May 20). State Laws Which Inform the Consumer of Price and Quality. Retrieved September 18, 2020, from https://healthpolicymaven.blogspot.com/2014/05/state-laws-which-inform-consumer-of.html

Winter, R. E. (2012). Unraveling US Healthcare-A Personal Guide. Rowman & Littlefield. Retrieved from https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972