Hospital Charges Continue Climb

  1. http://www.seniorjournal.com/NEWS/Fe...argesClimb.htm

    Hospital Charges Continue Climb,
    Even After Changes in Medicare Payment Policy
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  2. 7 Comments

  3. by   mobilsurgrn
    And yet..those who know anything about how hospitals bill and how they are paid understand that charges have nothing to do with reimbursement, profit, or really anything. That is why thre are no rules or regulations realtive to charges.

    Hospital revenue is based on prenegotiated per diem rates or DRG based flat-payment. The only exception is private pay patients who get GAUGED (if they ever attempt to pay for their care.) and the few remaining payors who reimburse based on a percentage of charges.

    This report uses irrelevant math to focus the lay public (in this case senior citizens) around the real issues. Yes profiteering is rampant, yes drug companies and device makers are raping and pillaging, yes hospital companies are sucking huge margins out of the system, but it has nothing to do with the amount a hospital chooses to mark-up an item.

    Couldn't the nurses' union take the $250,000 or so that they spent on this "report" and do a study on how to get more 17 year-olds to choose nursing over a career in information systems?
  4. by   pickledpepperRN
  5. by   ICUHMO
    Hospital revenue is based on prenegotiated per diem rates or DRG based flat-payment. The only exception is private pay patients who get GAUGED (if they ever attempt to pay for their care.) and the few remaining payors who reimburse based on a percentage of charges.

    This is a topic that I happen to know something about. Insurance companies are starting to use Medicare DRG rates as the basis for compensation for commercial insurance. This means that after the 3rd or 4th hospital day, the hospital is in the hole and never recovers, even if every possible outlier increase is approved. I've seen cases where the per diem rate doesn't even pay for the nurses' salaries, forget about anything else!

    This is bad for the hospital, for sure, but it's awful for the patient. :angryfire You know darn well that those fully insured "black hole" patients aren't likely to get the care they need.

    I don't know what to do about this, but it's a BIG problem.

    Your thoughts?
  6. by   ICUHMO
    Quote from ICUHMO
    Hospital revenue is based on prenegotiated per diem rates or DRG based flat-payment. The only exception is private pay patients who get GAUGED (if they ever attempt to pay for their care.) and the few remaining payors who reimburse based on a percentage of charges.
    This is a topic that I happen to know something about. Insurance companies are starting to use Medicare DRG rates as the basis for compensation for commercial insurance. This means that after the 3rd or 4th hospital day, the hospital is in the hole and never recovers, even if every possible outlier increase is approved. I've seen cases where the per diem rate doesn't even pay for the nurses' salaries, forget about anything else!

    This is bad for the hospital, for sure, but it's awful for the patient. :angryfire You know darn well that those fully insured "black hole" patients aren't likely to get the care they need.

    I don't know what to do about this, but it's a BIG problem.

    Your thoughts?
  7. by   mobilsurgrn
    my thought is that the problem is spiraling out of control. i am amazed that there aren't several hundred healthcare policy makers locked in a room picking the issue apart piece by piece. this issue, more than any other, in my mind has the potential to be the undoing of this country.

    the only solution to me is to zero base the current reimbursement model, make payment based on documented costs plus the percentage the hospital directly reinvests into care delivery plus a reasonable margin to cover the indirect costs of doing business. i think we must put caps on device costs. the current model, where spine implants, hip/knee prostheses, implantable defibrillators, pain stimulators, drug-eluting stents, result in costs that exceed $30,000 for 3-4 day stay and none of these devices have clinical efficacy studies beyond 3-4 years. meanwhile, to your point, a chf or pneumonia patient gets less than optimal care for an 8-10 stay because the perdiem rate averages $400/day.

    and this is my supreme soapbox aspect of the issue. nurses aren't attaining and maintaining any sense of business literacy on these issues. we believe that the hospital makes a ga-gillion dollars a year and that goes into someone else's pocket. we don't really have any idea that at the end of the year we get less than 30% of what we charge and we spend 90% of what we get. if we are responsible we put that 10% back into capital investment for the coming years. for those of us who work in systems, we don't realize that our hospital may make money and that some of that goes to a sister hospital somewhere else that loses money or vice-versa.

    this cna paper is evidence, in my humble opinion, of how misinformed we are. how could a "nurses association" put this out and think that they are empowering or educating their members? i suspect that wasn't their motive but why not use nurses' dues dollars to facilitate a multidisciplinary think tank, one that has not already endorsed a one-payor model to rattle the cages of managed care, device makers, and drug companies. this report is nothing but a bunch of numbers with lots of zeros and innuendo. it won't be taken seriously by anyone who understands how things work. god knows they know how to rattle cages, just ask the once, self-proclaimed, terminator.

    i believe this is a snapshot of the bigger problem and that is that healthcare spending constitutes such a huge chunk of the livelihood for so many self-absorbed and self-serving entities and the country at-large has stopped caring about the long term effects of deficit spending on healthcare. the alarming reality is that we are running out of money and the bill will come due much, much sooner than the public realizes.
    Last edit by mobilsurgrn on Dec 17, '05
  8. by   hope3456
    I know this is a complicated subject - but just one example of problems w/ hosp gouging uninsured patients. I just started a new job about the same time I became pregnant. I went to the dr w/o having my insurance card - I hadn't gotten it yet. I got the routine OB lab workup done - which was sent to the hospital lab. I even asked how much this would cost - not knowing for sure if it would be covered by my ins. The phleb. estimated $220. I got a bill in the mail for these labs - $398! However, I was able to send it to my ins and they took care of it. This particular ins. sends a statement including the cost that THEY paid for the services.

    They paid the hosp. $77 for the labs.

    This country definately needs a single payor health delivery system.
  9. by   grannynurse FNP student
    Quote from hope3456
    I know this is a complicated subject - but just one example of problems w/ hosp gouging uninsured patients. I just started a new job about the same time I became pregnant. I went to the dr w/o having my insurance card - I hadn't gotten it yet. I got the routine OB lab workup done - which was sent to the hospital lab. I even asked how much this would cost - not knowing for sure if it would be covered by my ins. The phleb. estimated $220. I got a bill in the mail for these labs - $398! However, I was able to send it to my ins and they took care of it. This particular ins. sends a statement including the cost that THEY paid for the services.

    They paid the hosp. $77 for the labs.

    This country definately needs a single payor health delivery system.
    What the public and most nurses fail to realize, is that most providers have negotiared the payment. By providers, I mean physicians, labs, OT, PT, hospitals. I leave out nurses because we do not value our labor enough to negotiate a fair payment. So, the estimate of $220, the bill of $398 and the actual payment of $77, was something that was negotiated long before your lab work was done.

    DRGs were the attempt to control cost in Medicare and Medicaid back in the 70s. The insurance companies attempted to use them to control their ever increasing costs. If one were to examine the rising cost, of health care, one would notice that a great deal is spent on capital improvements, i.e. the newest, latest MRI or scanner. And physicians are in on the grab, as well, telling the facility they will not admit, unless xyz is offered. And of course there is always the salaries of upper management. Adding to cost is the different codes and forms that each insurance company demands be used.

    Quite simply, you are going to pay more for your heath insurance, you are going to see a continous rise in your co-payment and deductables, and there is little you can do about it. I worked as one of the initial individuals, charged with trying to bring NYS Medicaid cost under control, in 1976. In 2003, they were still attempting to do the same thing. I reviewed hospital charges for concurrent and retrospective reviews, here in Florida, during the 80s. I've spent the last 15 years reviewing my own Medicare bills and have drawn attention several times to errors. Without my knowledge of how the system functions, I would be p----- in the wind.

    Grannynurse

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