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State website offers ability to compare local hospital costs Featured

Wear The CostConsumers can compare hospitals’ prices for four common procedures at a new website, wearthecost.org, started Oct. 19 by the Maryland Health Care Commission.

The site, named for “Wear the Cost” T-shirts urging consumers to check on health cost comparisons, has “all-in costs” for knee and hip replacements, baby deliveries, and hysterectomies. MHCC executive director Ben Steffen told the Sentinel that the site will add costs on many other medical procedures, some hospital-based and some not, over the next several years.

“There is price variation between hospitals in Maryland,” Steffen said. “We think consumers should be aware of that.”

According to the website, the highest cost vaginal baby delivery is 42 percent above the lowest cost; for hysterectomies, the highest is 71 percent above the lowest; and for knee and hip replacements, the highest are 64 and 85 percent above the lowest, respectively. The average costs are $10,841 for deliveries, $16,381 for hysterectomies, $29,059 for knee replacements, and $30,779 for hip replacements, MHCC said.

The wide range of prices in Maryland reflects medical pricing throughout the country, noted MHCC chairman Dr. Robert E. Moffitt, a Heritage Foundation health policy leader. “The U.S. has the highest health care costs in the world — and costs are rising faster than in other rich countries,” Moffitt said. Prices differ not only statewide, but also among hospitals in the same local markets, Steffen added.

No hospital is consistently the highest or lowest cost in the MHCC data. However, Johns Hopkins in Baltimore is the highest for the two services it offers, vaginal deliveries and hysterectomies. Replacement surgeries are most expensive at two MedStar hospitals in Baltimore. Two University of Maryland system hospitals, in Baltimore and Easton, are least expensive for replacement surgeries and hysterectomies. Anne Arundel Medical Center (AAMC) offers the lowest cost baby delivery.

Not all hospitals furnish all four procedures. The numbers of hospitals offering the four services ranged from 10 for hip replacements to 24 for baby deliveries.

Hospitals in Montgomery County tend to be in the mid-to-lower range of MHCC price data for the four procedures. The County has six hospitals: Shady Grove Medical Center in Rockville, Washington Adventist Hospital in Takoma Park, Holy Cross Hospital in Silver Spring and Germantown, Medstar Montgomery Medical Center in Olney, and Suburban Hospital in Bethesda, part of the Johns Hopkins Health System.

For “all-in costs,” MHCC includes (1) what the hospital charges (for operating room, staff, equipment, recovery facilities, etc.), (2) professional charges (such as for a surgeon and anesthesiologist), (3) outpatient costs (such as tests, radiology, office visits before and after surgery, and post-operation nursing care), and (4) pharmacy, including post-op pain killers. Those are expected costs, Steffen said.

The website calculations also include unexpected costs, he added. For example with deliveries, the website lists extreme bleeding after delivery, high blood pressure, infection in the urine, breast or nipples, and clots in leg veins as unexpected adverse events. MHCC estimated these costs from data the hospitals submit about the frequency of such events, plus data about the costs of treating such events.

The sum of the expected and unexpected costs is the cost for a given procedure at a given hospital, Steffen said. On the website, he noted, cost breakdowns are given between expected and unexpected, and the four main categories of expected costs noted above.

Steffen noted that patients with insurance sometimes pay a small fraction of the overall cost of these four procedures. Other patients, he said, have high deductibles—which for family coverage now run as high as $10,000 to $12,000 per year on some policies—and so may be very concerned about relative costs between hospitals. Uninsured patients have to pay a hospital’s “billed charges” unless they qualify for charity care, he added.

Doctors may have patient admitting privileges at several hospitals, and may be influenced by the patient’s choice in directing an individual to a given hospital, he said. “If consumers are part of this equation and this conversation, it will affect doctors,” Steffen added. With information on price and quality, he noted, “Consumers can ask better questions.”

MHCC’s Center for Analysis and Information Systems developed the website and data working with Altarum, a Michigan-based health care consulting firm, and they’re continuing their work to add the costs for other medical procedures. Some of MHCC’s costs were defrayed by a grant from the federal Department of Health and Human Services.

According to the website, they used 2014-15 cost data from Maryland private insurance carriers. In 2018, they will add federal Medicare data for Maryland, also from 2014-15.

Steffen noted that Maryland is the only state in the country that approves rates hospitals can charge for certain given procedures. That’s done by the Health Services Cost Review Commission, which is separate from MHCC, although the agencies work closely together, he said. Under the regulatory system, he explained, a given hospital can have rates for a given procedure that differ from other hospitals, but must charge all payers (insurers and patients without insurance) the same amount for the same regulated service.

Maryland has no for-profit hospitals, he added. “Certainly, the unique [pricing] system is part of the reason” that for-profit hospitals are not in the state market.

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