The True Cost of Surgical Procedures

In the United States, healthcare costs are much higher than those in other developed countries, and it has been this way for quite some time.  Unfortunately, this doesn’t necessarily equate to superior health or even a higher standard of care [1].  While Americans typically pay significantly more, their healthcare is often no better than that of people in other countries.  It seems you don’t always get what you pay for.  

Historically, a major factor in these massive healthcare costs has been a lack of transparency.  It was always notoriously difficult to obtain a fixed price for a hospital procedure in advance, and it was nearly impossible to gather enough information from various hospitals to compare out-of-pocket costs or shop around.  Fortunately, the federal government attempted to correct this problem by publicly releasing “rate card” prices (full charges before insurance company discounts) for hospitals throughout the US, revealing the “true” costs of the hundred most common services and procedures.  This information revealed what many had long suspected: There were huge disparities in prices.  For example, a joint replacement is a simple and common procedure.  But in the New York City area, a joint replacement could cost anywhere from $15,000 to $155,000.  Many variables, including quality of physicians, real estate prices, variable labor rates, etc., could explain a sizable difference in pricing, but they could not explain why the same procedure in the same city might vary in cost by an order of magnitude.  The only possible conclusion any reasonable person could draw is that the $155,000 price tag was designed to maximize profits (or, possibly, to offset losses elsewhere) [2].

In 2013, the Centers for Medicare and Medicaid Services began releasing their hospital pricing data.  If patients could compare prices at different hospitals, the more expensive providers would have to lower their prices to remain competitive.  While this is sound reasoning, it has yet to happen [3].  Unfortunately, the information available is largely esoteric, as few people can successfully navigate the data sheets made public.  Determining the difference between a fair price and highway robbery requires a working knowledge of hospital procedures, codes, and other specialized information [4].  Even those who are capable of making such a determination are often handcuffed to certain providers depending on their insurance plan.  With the advent of self-funded health plans, knowing actual costs and what healthcare providers charged became absolutely critical for employers.  These employers, however, are usually no more knowledgeable than their employees, and it is still incredibly difficult to acquire sufficient information and negotiate a fixed price for a procedure or other service.

 

Fortunately, BridgeHealth has this covered.  Since 2007, BridgeHealth professionals have negotiated bundled prices for myriad surgical procedures for various organizations and plan members.  When patients and their employers know the total cost of a procedure, there’s no guesswork involved in the final bill.  Pre-negotiated case rate pricing empowers BridgeHealth clients to control costs.  And since BridgeHealth only works with the top 25 percent of hospitals nationally, these fixed prices never mean sacrificing quality of medical care.

  1. Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences, The Huffington Post, http://www.huffingtonpost.com/2013/05/08/hospital-prices-cost-differences_n_3232678.html
  2. The Great American Hospital Pricing Scam Exposed – We Now Know Why Healthcare Costs Are So Artificially High, Forbes, http://www.forbes.com/sites/rickungar/2013/05/08/the-great-american-hospital-pricing-scam-exposed-we-now-know-why-healthcare-costs-are-so-artificially-high/
  3. Medicare Provider Utilization and Payment Data, Centers for Medicare & Medicaid Services, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html
  4. Disparity in Medical Billing, The Washington Post, http://www.washingtonpost.com/wp-srv/special/national/actual-cost-of-medical-care/
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