HPCI News: The Nagging Mystery of How Much Things Cost in Hospitals

To: Members and Selected Others

Although U.S. hospitals account for the single largest chunk of the nations $2.7 trillion in health spending, few of them can say how much it actually costs them to care for every patient they admit. "To think that health care is this ginormous business that doesn't understand costs is mind-blowing." says Vivian Lee, Senior Vice President for Health Sciences at the University of Utah, an academic medical center with four hospitals and 1,330 physicians. "We don't know what it costs, so how can we manage it?", he went on to point out.

Now the Utah health system is one of a handful in the nation with a data system that can track cost and quality of care for every one of its 26,000 patients. Those data are shared with doctors and nurses for further input about ways to streamline cost and improve care. Other systems, including MD Anderson in Houston and Intermountain Healthcare in Utah, have made such ambitious efforts.

"The primary purpose is to get better outcomes for patients while spending less," says Bob Kaplan, a Professor Emeritus at Harvard Business School. Hospitals face huge financial pressures. Medicare payments are being squeezed. Insures and employers are increasing demanding data about quality and costs. Also, there are urgings to move away from the traditional way hospitals are paid to flat or bundled payment for patient care.

The example below shows wide variation in prices in greater Iowa hospitals for the same service. They range from $210 to $589.70.

Hospital Price for Emergency Room Visit - Level 2 (CPT 99282), Based on 2014 Claims Data in Greater Iowa

$210.00 - Mercy Medical Center, Dubuque
$214.00 - Broadlands Medical Center, Des Moines
$217.00 - Skiff Medical Center, Newton
$223.00 - Avera McKennon Hospital, Sioux Falls
$231.00 - Nebraska Medical Center, Omaha
$233.00 - Finley Hospital, Dubuque
$234.00 - Stanford USD Medical Center, Sioux Falls
$239.13 - Trinity Regional Medical Center, Fort Dodge
$255.94 - Saint Luke's Regional Medical Center, Sioux City
$258.00 - Genesis Medical Center - East, Davenport
$263.00 - Methodist Hospital, Omaha
$263.00 - Methodist Jennie Edmundson, Council Bluffs
$271.00 - Great River Medical Center, West Burlington
$274.68 - Saint Mary's Hospital, Rochester, MN
$286.00 - Mercy Medical Center, Clinton
$293.55 - Allen Memorial Hospital, Waterloo
$297.00 - Olmsted Medical Center, Rochester, MN
$305.00 - Mercy Medical, Sioux City
$317.00 - Mercy Medical Center Northern Iowa, Mason City
$341.25 - Trinity Muscantine, Muscantine
$341.25 - Trinity Medical Center, Rock Island
$364.00 - Grinnell Regional Medical Center, Grinnell
$375.25 - Mary Greeley Medical Center, Ames
$389.00 - Covenant Medical Center, Waterloo
$389.00 - Sartori Memorial Hospital, Cedar Falls
$395.11 - Mercy Medical Center, Cedar Rapids
$413.00 - Mercy Medical Center, Des Moines
$415.00 - University of Iowa Hospitals & Clinics, Iowa City
$461.00 - St. Luke's Hospital, Cedar Rapids
$474.00 - Lakeside Hospital, Omaha
$474.00 - Immanuel Medical Center, Omaha
$474.00 - Alegent Health Bergan Mercy, Omaha
$474.00 - Creighton University Medical Center, Omaha
$474.00 - CHI Health Mercy, Council Bluffs
$488.95 - Mercy Hospital, Iowa City
$548.62 - Iowa Lutheran Hospital, Des Moines
$548.62 - Iowa Methodist Medical Center, Des Moines
$589.70 - Ottumwa Regional Medical Center, Ottumwa

Source: Hospital Pricing Specialists, July 2015

Paul M. Pietzsch, MPH
HPCI - IHBA Office
4430 Ashley Park Drive
West Des Moines, Iowa 50265
(515) 778-6300

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