Report: If you’re ill, it pays to shop around hospitals in valley

Sunrise Hospital is shown in this 2008 file photo.

If you show up at Valley Hospital experiencing heart failure and shock with major complications, the charge for treatment is $109,869.45, nearly 2.5 times the treatment charge at University Medical Center, which is just a few steps away.

And at Valley, it’s nearly twice as much –– $70,593.18 –– than at UMC to be treated for simple pneumonia and pleurisy with complications.

A few miles across town at Sunrise Hospital, the patient with heart failure and shock would be charged $94,363.06 while a patient with pneumonia and pleurisy would be charged $62,134.63, according to a federal database of 2011 hospital charges released Wednesday.

The database also revealed vast disparities nationally.

The average charges for lower extremity joint replacement range from about $5,300 in Ada, Okla., to $223,000 in Monterey Park, Calif.

In Las Vegas, the range is $71,357.64 at UMC to $118,996.01 at Summerlin Hospital.

Medical billing has long been a bone of contention among patients in Southern Nevada and across the country. And while the database released by the U.S. Centers for Medicare & Medicaid Services sheds new light on the mystery of just how high a hospital bill might go, it doesn’t answer the key question: Why do some hospitals charge as much as 40 times more than others?

“It’s hard to have a rational explanation of why some pricing ends up as it does,” said Brian Brannman, CEO of UMC, where charges generally are lowest in the Las Vegas Valley. “I can’t make rhyme nor reason out of some of the charges put forward. We think what we put forward are fair considering the market we are in.”

Brannman said it would make no sense for UMC to charge more, given the high number of uninsured and nonpayers the hospital serves.

“We’d just have that much more debt on the books,” he said.

Brannman said it is possible that for-profit hospitals in Las Vegas charge more to make up for a low Medicaid reimbursement rate in Nevada that often doesn’t cover half the costs of someone’s treatment.

Release of the pricing data by the government, he said, could be a good thing “in that it helps with transparency and could get a discussion started” over what fair pricing should be.

Jonathan Blum, director of the government’s Center for Medicare, is as mystified by hospital pricing as Brannman.

“It doesn’t make sense,” he said.

Blum said the higher costs can’t be explained by regional economic differences alone, and he stressed that they don’t reflect better care.

UMC, for instance, is the American Heart Association’s most highly awarded cardiology center in Nevada, yet its charges for heart care are the lowest.

Blum said he hopes making the information available without charge to the public will help generate answers to the riddles of hospital pricing and put pressure on the more expensive hospitals.

The fees that Medicare pays hospitals aren’t based on their charges, Blum said. But patients who are without government or private medical coverage are subject to them. The new information should help those patients decide where to get care, he said.

Brannman said a car dealership “list price” is a good analogy for hospital charges. Most patients won’t be hit with the “sticker price” because their bills are paid by their private insurance, Medicare or Medicaid at lower rates. Insurance companies routinely negotiate discounted payments with hospitals.

The charges do show up on the bills of people without medical coverage, many of whom try to negotiate smaller fees for themselves. Uninsured Clark County residents automatically get a 50 percent discount at UMC. Other hospital officials say they frequently give the uninsured discounts.

Some people pay full price, or try to afford it, because they don’t know they can bargain for a discount, said Chapin White of the nonprofit Center for Studying Health System Change.

“This is the opening bid in the hospital’s attempt to get as much money as possible out of you,” White said of the listed charges.

“These charges really don’t have a direct relationship with the price for the average person,” White said. “I think the point is to shame hospitals.”

Statements from representatives of the Sunrise Medical System (Sunrise, MountainView and Southern Hills hospitals) and Valley Health System (Valley, Spring Valley, Summerlin, Centennial Hills and Desert Springs hospitals) do little to answer the question of why hospitals charge as they do.

“What patients pay has more to do with the type of coverage they have than charges,” Amanda Powell of Sunrise wrote in an email. “Government programs like Medicare and Medicaid determine how much they reimburse hospitals. Insurance plans negotiate their payments. Everyone else is eligible for our charity care program or they receive our uninsured discounts, which are similar to the discounts a private insurance plan gets.”

Valley’s Gretchen Papez wrote: “The data released by the Center for Medicare and Medicaid Services does not reflect the amounts that pay for medical care provided. The ‘charges’ listed by the report are not the actual prices paid by patients, but instead reflect historical price structures of individual facilities based upon a myriad of factors.”

“Hospitals that charge two or three times the going rate will rightfully face scrutiny,” Health and Human Services Secretary Kathleen Sebelius said Wednesday after the release of the list of the average charges at 3,300 hospitals for each of the 100 most common Medicare inpatient services.

The prices, from 2011, represent about 60 percent of Medicare inpatient cases.

Consumers will benefit from more information about a system that too often leaves them with little way of knowing what a hospital will charge or what their insurance companies are paying for treatments, Sebelius said.

Previously, the price information that the government collects from hospitals wasn’t available to consumers, although the data could be purchased for uses such as research, officials said.

The department also is making $87u2007million in federal money available as grants to states to improve their hospital rate review programs and get more information about health care charges to patients.

The Associated Press contributed to this report. Contact reporter Paul Harasim at pharasim@reviewjournal.com or 702-387-2908.