Anyone who thinks the healthcare apparatus in this country doesn’t need radical liposuction should read through the new federal report on hospital costs.
Make that alleged costs. All over the country, hospitals are billing Medicare ludicrously different amounts for treating patients with the same disorder.
The Centers for Medicare and Medicaid Services studied the charges for 100 common in-patient procedures at 3,337 U.S. hospitals during fiscal year 2011. The disparities are outrageous and random to the point of whimsy.
As always, South Florida is a poster child for the nationwide dysfunction.
Baptist Hospital in Kendall billed Medicare an average of $28,706 for treating a patient with bronchitis and no complications. That’s 75 percent higher than the national average of $16,257.
At North Broward Medical Center, the cost for a patient with the same diagnosis was $14,823. At Cleveland Clinic in Weston, the charges averaged only $9,726.
A reasonable person might wonder why it costs almost three times more to treat bronchitis at Baptist than it does at the Cleveland Clinic. The answer is that it really doesn’t.
The bills sent by hospitals to Medicare and insurance companies are essentially works of fiction. Never is the amount fully paid, or even considered. The name of the game is inflate, and take whatever they give you.
Medicare uses a standardized reimbursement formula for specific types of cases. For instance, while Baptist billed the agency more than $28,000 for each bronchitis admission, the hospital received on average about $4,800 back from Medicare, or 17 percent of the submitted charges.
By comparison, North Broward Hospital got $3,723 per case and the Cleveland Clinic received $3,377.
Medicare patients usually don’t get stuck with hefty balances, because most hospitals simply write off the difference between their “charges” and what the government reimburses them. That’s the only check they expected to see.
While a patient with private medical coverage is responsible for deductibles and co-payments, his or her insurance company will ultimately pay the hospital an amount that bears no resemblance to the shocking sum at the bottom of the bill.
And the hospitals will happily take it. Why? Because the numbers weren’t real to begin with.
It’s not a harmless charade if you happen to be one of the 45 million Americans without health insurance coverage, and you wind up in an emergency room.
The bill that comes to your mailbox will be the same mind-boggling document that would otherwise be sent to Medicare or an insurance company — only the hospital will ask you to pay all of it.
Most patients can’t. The resulting hassle could screw up your credit and your life for a long time.
The federal survey of hospital charges, released last week, was the most comprehensive ever — and the most embarrassing.
In response, some facilities with extremely high costs said they accept sicker, older patients who require more care. Teaching hospitals said their operating expenses are unavoidably higher.
Still, nothing but flagrant padding explains why hospitals routinely send bills to Medicare that are three to five times more than what the agency will pay to treat a certain condition.
Sometimes the charges equal 10 or even 20 times the known rate of reimbursement.
Do the math. If the expenses claimed were genuine and the bills were honest, all hospitals would be dead broke. They’d be losing money on every patient.
According to the feds, Coral Gables Hospital charges $110,608 for a person admitted with heart failure and multiple complications. Mysteriously, just a few miles away, Jackson Memorial bills only $48,429 for the same category of patient.
Meanwhile, Jackson charges $66,000 to implant a cardiac pacemaker, roughly half as much as the University of Miami Hospital right across the street.
That’s the story everywhere. Hospitals reporting relatively sane charges for treating one type of illness will jack up the bill insanely for another.
Medicare knows these astronomical dollar figures are nonsense. So do the major insurance carriers. Everybody shrugs, signs the paperwork and moves on.
Meanwhile, Americans have no way of finding out the true cost of medical care. The process seems designed at every level to conceal and confuse.
A new hip at Doctors Hospital in the Gables for a patient with multiple complications: $208,602. Medicare reimbursement: $35,402. The rest of the bill basically gets ripped up, unless you’re not on Medicare and don’t have any insurance.
That’s the only time those big heavy numbers are real — when they get dropped on somebody with no safety net.
What a system.