What's it going to cost? Pa. hospital bills vary widely
Why did a colorectal procedure cost $36,957 at Hanover Hospital but $58,547 at WellSpan York Hospital? And is there a reason admission for pneumonia cost $22,860 at York Hospital and $43,985 at Memorial?
A report by the Pennsylvania Health Care Cost Containment Council shows health care costs can vary drastically based on where a procedure is done.
The council, or PHC4, is an independent state agency formed to address rapidly growing health care costs. It collects inpatient hospital discharge and ambulatory/outpatient procedure records from hospitals and freestanding surgery centers in Pennsylvania in hopes of stimulating competition through cost transparency and highlighting effective health care providers.
For the 17 procedures examined in the council's fall report, local hospitals charged significantly less than those elsewhere in Pennsylvania and differed only by a few thousand dollars for most procedures in their billing.
When compared with other hospitals in the central and northeastern part of the commonwealth, only two procedures — aspiration pneumonia and COPD — cost more to treat at York County’s three hospitals. All 17 procedures cost less in York County than in Pennsylvania on average, sometimes by as much as tens of thousands of dollars.
Hanover Hospital charged the least for 10 procedures performed between January and September 2015. Memorial Hospital and York Hospital both came in lowest for three procedures each and one procedure, open gallbladder removal, was only performed locally enough at York Hospital to get an average cost.
For most health care procedures, the price charged is not the price paid. The out-of-pocket costs for most consumers are often well below sticker prices after insurers foot most of a bill.
Not only do hospitals have contracts with different insurers that pay different prices, but public health insurance programs such as Medicaid and Medicare, the primary payers for 46 percent of statewide hospital admissions, pay out significantly less than sticker price.
Guroo, a search tool created by the nonprofit Health Care Cost Institute, goes beyond the sticker price and estimates actual procedure costs based on more than 758 million claims from insurers and their reported negotiated rates with providers between 2012 and 2016.
By their estimates, laparoscopic gallbladder surgery, which uses small instruments and a camera to remove the gallbladder through the abdomen, cost most insurers about $17,000 in Pennsylvania, but Hanover, York and Memorial hospitals charged between $24,045 and $29,648 for the procedure, according to the PHC4 report. Statewide, most hospitals charged about $50,000 for the procedure, with Berwick Hospital Center in northeastern Pennsylvania charging almost $100,000.
Reimbursements for coronary angioplasty with a stent, common for admission after a heart attack, came in near $35,000, but the statewide average hospital charge was more than twice that — $88,000. Hanover charged $53,297 for the procedure, York charged $59,120, and Memorial charged $62,214. Patients at Lancaster General and Regional hospitals were charged $60,296 and $101,738 respectively.
Different hospitals have different billing strategies, explained Michael O’Connor, WellSpan Health’s senior vice president of finance.
“Ours has been to be lower priced (with lower discounts), generally, versus some organizations which offer very high prices and then offer high discounts,” O’Connor said.
Through the organization's financial assistance policy, significant discounts are offered for those making up to 400 percent of the federal poverty threshold. The federal poverty line for a family of four is about $25,000.
There are also advantages of scale.
O’Connor credited a large physician practice, significant footprint of ambulatory service centers and coordinated care throughout the medical group with helping to keep WellSpan’s billing down, but he said he worried about rising costs and the impact of high-deductible plans on future patients.
However, the final cost can't really be determined before a surgery is performed, he explained. Since no patient is the same, no bill is the same. Patients can ultimately only rely on ranges given by customer service.
“We have to caveat whatever we’re coordinating so the patient understands these are estimates," he said. “Surgery has a range. Not all cases are exactly the same.”