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Part of the problem, some say, is that when someone is ill, they simply cannot shop around for the best health care prices.
KUSA – At a time when high-deductible health care plans are starting to dominate the health insurance market, patients like Dave Paulides are finding themselves more and more befuddled by the myriad of seemingly nonsensical charges on their hospital bills.
The practice, long embraced within a system critics say lacks overall transparency, allows providers to make complex billing decisions behind closed hospital doors, outside of the view of patients who stand the most to lose.
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It also leads to a disconnect between number-crunching hospital executives and patients who frequently fail to comprehend why, for example, a hospital like Swedish Medical Center would bill someone $441 for a sterile bag of salt water.
“This is completely outrageous. I don’t understand it. I don’t get it,” Paulides said as he showed 9Wants to Know his bill and its 10 separate charges for liter bags of saline.
Three times Swedish billed him $441. On average, Swedish billed him $359 for each of the 10 bags.
“What they charged wasn’t over the top. It was over the mountain,” he said.
Three days later, 9Wants to Know watched as the station’s medical expert, Dr. John Torres, paid $2.73 for a similar bag of saline online.
A 13,000 PERCENT MARK UP
There’s nothing magical about liter bags of saline. Frequently used to treat dehydration, saline is, for all intents and purposes, the same liquid we cry when we shed a tear.
While shortages on the supply side (only a few businesses make it for hospitals currently) have led to steady price increases as of late, the federal government still refuses to reimburse hospitals more than $2 for a bag for Medicare patients.
Even if Swedish – owned by Hospital Corporation of America -- paid $2.73 for a bag of saline, the $359 average amount billed to Paulides represents a 13,000 percent cost increase. It would be like a grocery store billing a customer $323 for a $2.49 loaf of bread or a gas station billing a motorist $188 for a gallon of gas.
When asked to explain the charges, a spokesperson for Swedish Medical Center declined our request and instead referred 9Wants to Know to the Colorado Hospital Association.
The CHA declined the 9Wants to Know request for an on-camera interview, but it did provide a lengthy written statement on the issue that suggested the billing question is a complex one to answer.
“Ultimately, charges must cover the costs of a health system that is constantly prepared for any and every health need in their community,” read the statement. “In the case of something that seems simple, such as a bag of saline solution, it is important to remember the entire system of care that it takes to safely administer the saline to the patient. This system starts when the patient registers in admissions, and includes all of the important around-the-clock, highly trained health care professionals prepared to respond in the event of a medical problem.”
Paulides didn’t buy the explanation outright considering he was also billed more than $9,000 for three days of “room and care” that conceivably tried to partially cover the “system of care.”
ALMOST NO ONE ACTUALLY PAYS $441 FOR SALINE
“Do you think hospitals could do a better job of explaining the $441 bag of saline?” 9Wants to Know recently asked former hospital executive and current assistant professor at Metropolitan State University of Denver Jeff Helton.
“Communication, communication, communication. Without a doubt,” Helton said. "It’s also complicated."
First of all, insurance routinely negotiates a better price on behalf of the patient. In the case of Paulides’ $45,000 bill for his three-day stay at Swedish for a possible case of sepsis, his insurance company lowered the bill to a little more than $10,000.
His insurance picked up around $6,000 which, in turn, left Paulides responsible for roughly $4,200 of the bill. It represents less than 10 percent of the initial bill.
If that percentage is applied to the initial $441 saline charge, the hospital still wanted Paulides to pay around $40 for something that can be bought online for less than $3.
Helton said it’s a bit more complex than that, and said hospitals routinely try to come up with ways to make up for loses in other areas of operation.
“I know from my experience when I had a price that was going to be on the higher end usually it was because I was trying to make up for that shortfall,” he said.
TRANSPARENCY COMING TO INDUSTRY WHETHER HOSPITALS LIKE IT OR NOT
Part of the problem, at least in the mind of Paulides, is that when someone is ill, they simply cannot “shop around.”
“When you’re a patient, and you’re waiting in that bed, you’re not thinking about prices. You’re not concerned about prices. You think you have insurance, and it’s going to protect you,” he said. “We just can’t step out of the hospital, go down the street, and go to another hospital to check their prices.”
Dr. Jay Want is the Chief Medical Officer of CIVHC, or the Center for Improving Value in Health Care, and said transparency is coming to the market. A lot of that, he said, can be attributed to the rise of high-deductible health care plans.
“People are starting to look at their bills and starting to say, ‘If I can’t understand it, why should I buy it?” he said.
What should a hospital bill for a bag of saline?
Dr. Want said it’s unclear, but what is clear is that hospitals are billing anywhere from $100 to $400.
It’s a feeling backed up by our own viewers when we asked you to write to email@example.com.
Wide price variability of cost for common medical items or procedures has become the norm, he said.
“Hospitals can charge $500 or $2,500 for exactly the same thing,” he said.
Bills our viewers have sent us show cost for a CAT Scan can run from $1000 to $8000 depending on the facility.
CIVHC was formed to help better educate patients on potential costs.
“I think the more information you can get, the better off you’re going to be,” he said.
His organization administers the Colorado All Payer Claims Database, the largest collection of medical cost data in the state.
He said, in the end, the patient must, at the very least, become better educated when it comes to his or her own insurance plan.
“What is their insurance going to pay for? What is it not going to may for? And am I going to do better at hospital X or hospital Y?” he said.
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(© 2016 KUSA)