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Hospital Charge Disclosure Proposal Receives Mixed Reaction

Posted on: Sunday, 16 October 2005, 15:00 CDT

By The Times and Democrat, Orangeburg, S.C.

Oct. 16--Proposed legislation requiring hospitals to disclose charges for their most common procedures received mixed reactions from area hospital administrators.

The Regional Medical Center president Tom Dandridge criticized the proposal citing it is too 'simplistic of an approach" in an effort to inform the consumer in what is a complicated and varied health care charge structure.

Bamberg County Hospital and Nursing Center administrator Warren Hammett said the disclosure would require a closer look at pricing structure and enhance competitiveness.

"If the idea is to inform the consumer, it gives them the wrong type of information," Dandridge said. "My issue has always been that the present system of charging is a confusing matter to the general public.

"Hospital charges vary all over the waterfront. The system is messed up and more efforts should be devoted to trying to straighten out the system as opposed to publishing charges that hardly anybody pays. Most are insured and those that are not insured get discounts as well."

Under the proposed legislation which was introduced by Sen. Jim Demint, hospitals would be required to regularly report to the Secretary of U.S.

Department of Health and Human Services the amount they charge for the 25 most commonly performed inpatient procedures, the 25 most common outpatient procedures and the 50 most frequently administered medications.

The Department would then post this information on the Internet for easy access.

"Consumers seeking routine hospital services need to know what they're paying so they can make educated decisions," said Sen. Demint. "This bill provides a simple mechanism for hospitals to disclose."

Currently, the bill is in the Senate and resides in the Committee on Health, Education, Labor and Pensions.

Dandridge said the charge disclosure would not take into consideration the cost of providing care and the varied hospital payer mix. Hospitals serving a greater population of poor or indigent (who don't pay) must increase charge costs to make up for revenue not received from indigents.

"A person will look at hospital x and say "Your prices are higher, but we are serving society in a different way," Dandridge said. "They will be punishing me because I treat more poor people."

TRMC announced last month it will increase its charges to patients beginning October 1. The increases were part of the 2006 fiscal year budget.

Dandridge said the real issue needing to be addressed is the fact that Medicare is projected to go bankrupt in 2018 with little having been done legislatively to address the issue.

"There is no doubt we need help in health care in this country," Dandridge said. "The system is broke. What I would like to see disclosed is how the public is taxed through the charging system of the health care industry to pay for people who can't pay for their care. We have to start with that."

Hammett cited the proposal as a 'turnaround' from what the federal Centers for Medicare and Medicaid Services have, over the past three to five years, looked at as a form of price fixing.

The CMMS is a reviewing arm of the nation's disproportionate share program, which pays hospitals that care for a disproportionately large number of indigent patients.

Both the TRMC and the BCHNC serve a larger than average number of Medicaid and Medicare recipients. Both payer groups have fixed payment contracts and pay hospitals a set amount regardless of procedure charges.

"I think it will make all of us examine what we are doing and how the charges are derived," Hammett said, noting that charge disclosure will most likely increase the competitiveness of the health care industry.

"We think that we would be very competitive from the pricing standpoint for the patients coming into our facility. Some people will go out there and shop."

Hammett said the hospital would abide by the disclosure policy but he did not foresee any changes in hospital operations.

Hammett said that some hospitals have made it a practice to keep an eye on other hospital charge structures informally with much of the charge structures also being shared through word-of-mouth.

Of course, Hammett noted that health care often transcends charge rates.

"A lot of health care depends on the relationship with doctors," Hammett said, adding that hospital care capabilities also vary. "If they want acute care, they will look at us. But for specialty care including cancer treatment, those are some of the things we don't provide here."

The proposal joins a companion bill introduced in June by U.S. Reps. Bob Inglis (R-S.C.) and Dan Lipinski (D-Ill.)

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Copyright (c) 2005, The Times and Democrat, Orangeburg, S.C.

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Source: The Times and Democrat, Orangeburg, South Carolina

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