Granny Bird Award: Hospitals Who Overcharge

This edition of the Granny Bird Award, given from time to time to those who adversely affect the rights and benefits of the elders, goes to those hospitals who overcharge for surgical procedures frequently required by the elders.

The Center for Medicare/Medicaid Services (CMS) has released a report showing the unbelievable variance in charges for procedures covered by Medicare.  The Los Angeles Times has checked California hospitals on that list and has found some pretty dramatic differences in charges for such procedures as hip replacements and gall bladder surgery.  Here's what the Times found on hip replacement:

Medicare released pricing information Wednesday for more than 3,300 U.S. hospitals on the top 100 procedures and treatments in 2011. The federal health program for seniors and private insurers only pays a fraction of these billed charges.

Nonetheless, this information shows the wide variation in prices among hospitals for common medical procedures at a time when policymakers are wrestling with how to hold down rising healthcare costs.

Officials said they released this data in hopes that increased transparency will help squeeze some excess cost out of the system and enable consumers to become savvier shoppers for healthcare.

One of the most common surgeries is for an artificial joint replacement. Medicare data show that Cedars-Sinai Medical Center in Los Angeles charged, on average, $110,123 for those cases. Keck Hospital of USC billed an average of $123,885 and Prime Healthcare's Centinela Hospital Medical Center in Inglewood averaged $220,881.

In contrast, Hoag Orthopedic Institute in Irvine billed Medicare $52,066, on average, for joint replacements and Kaiser's Los Angeles Medical Center charged $35,524.   [Emphasis added]

The spread on laprascopic gall bladder surgery is just as variable.  And, as the article points out, the "cash" price is often dramatically lower than any quoted price for the insured.

The problem is that elders don't have the ability to shop around for a good price.  Whether they have a Medicare Advantage plan or a straight Plan B and Plan D, they are pretty much stuck with the facility their doctor is on staff at.  And then what?  What about the balance?

And, just as importantly, who pays that balance?  Who ultimately gets stuck with the bill and what does that do to the cost of healthcare for everyone?

No, the system is messed up and needs to be cleaned up.  It's long past time to take medical treatment out of the hands of private enterprise.