Comparing the cost of care

Public vs. Private

When it comes to healthcare, you don’t necessarily get what you pay for. More expensive care isn’t sure to be better, often it just costs more than the same quality of care costs elsewhere.

Take hip replacement for example. At HHC’s Bellevue Hospital, charges for a hip replacement without complications are $20,927. At not-for-profit NYU Langone Medical Center charges for the same procedure are a hefty $82,605. Across the Hudson in Jersey City, the for-profit Christ Hospital charges an outrageous $139,072.

This is just one instance of the wild discrepancy in medical costs that is finally coming to light. In May, the federal government released data on hospital pricing and Medicare reimbursement payments for the 100 most common inpatient procedures. A review of these costs by The Washington Post found that for-profit hospitals tended to bill Medicare at a 29 percent higher rate, on average, than did nonprofit or government-owned hospitals.

Variable fees

Discussion about the high and unpredictable cost of healthcare heated up with Steven Brill’s eye opening cover story in Time magazine, “Bitter Pill: Why Medical Bills are Killing Us,” in early March. He examined how hospitals set exorbitant “chargemaster” prices, which are then dramatically discounted by government programs, such as Medicare, and through negotiations with insurance companies. Brill found that as more hospitals consolidate into networks, their leverage in these negotiations increases and prices climb closer to the chargemaster rates than the Medicare rates.

A series of articles in The New York Times by Elisabeth Rosenthal looked at colonoscopies, pregnancy, and joint replacement to explore why the U.S. leads the world in healthcare costs. She found that hip replacements, for example, cost, on average, about four times more in the U.S. than they do in France or Switzerland.

Rosenthal also digs into the opacity of hospital bills, exposing unduly high charges for drugs, devices, and procedures. She notes that unlike most industrialized nations, the only healthcare rates that are set in the U.S. are for Medicare and Medicaid.

The single-payer solution

Both Brill and Rosenthal agree that those least able to pay, the uninsured and the underinsured (the “almost poor” as Brill calls them), end up being charged the most.

Brill’s proposed solution? Initially, he recommended a complex list of fixes for healthcare, including antitrust actions, taxing hospital profits, and amending patent law. But he is coming around to single-payer as the logical response: “It’s sort of the cleanest way to keep costs down.”

“We provide excellent services to the poor. Our challenge is to keep public healthcare alive in this era of privatization. I became a nurse because I wanted to embrace people and prevent tragedies from happening. Nurses are totally committed. We give from the heart.”

– Charles Mighty, RN, Metropolitan Hospital

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