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Closely guarded industry secret on healthcare costs

Updated: Wednesday, October 9 2013, 09:13 AM CDT
New information about hospital pricing that could help you make even **better decisions about your health care.

A closely guarded industry secret that you may be paying twice - or even three times more than you need to for common medical procedures.

Every six months, Margie Amspacher goes to the same hospital in Newberg for the same blood test.
She has Type-2 Diabetes.
"You need to have that hemoglobin A1C checked."

It usually costs 42-dollars.
But this summer, she changed doctors - and went to a new hospital in Forest Grove.
Same blood draw. Different bill.
"I got my bill and I went 'wow' there's quite a bit of difference between this bill.")

The Forest Grove hospital charged her $80-bucks instead.

"That's kind of odd, especially when one test was twice as much! Chelsea? And it was the same test? It was basically the same test)

The bill bombshell left Margie feeling defeated - by the very profession she serves.
See, Margie's been a nurse for 30 years.
Do you feel left in the dark? I do. I mean, I'm a healthcare professional and this should be pretty easy to figure this stuff out and -- I've got a little background, a little knowledge. I can't imagine what it would be like if I didn't have that."

What Margie didn't realize?
For years, hospitals have kept their price lists -- known as charge masters -- closely guarded secrets.

But data just released by the federal government ... Outlines, for the first time, what hospitals across the country charge for the 100 most common procedures.

We poured over the data and found, what happened to Margie - happens to countless other patients in Oregon and Washington.  And not just for simple blood tests.

Our research reveals local hospitals are charging wildly different prices for the same procedures… from x-rays to major surgery.

And in a community that prides itself on outdoors adventure, injuries - and trips to the hospital - come with the territory.
Let's say you crash your bike - and end up with bad back pain.

If you walk into Legacy Emanual in Northeast Portland, you'll walk *out with a 34,000 dollar bill ($34,715). If go to Oregon Health and Science University in Southwest Portland, the same treatment is 19,000 ($19,616). at Providence St. Vincent in Washington County, it'll cost $15,000 ($15,774). but if you go to Salem Hospital, their Chargemaster price is only 12,000 ($12,585). That's as much as a 22,000 dollar difference depending on where you go.

Now, let's say you have chest pain. At OHSU, treatment for chest pain will set you back, on average, $9800 ($9,827). but if you hop in the car and drive the 15-minutes to Legacy Good Samaritan.  the same treatment is *13,000. ($13,517)

Even within the same hospital network, there are disparities. Take joint replacements - a common surgery for a lot of northwest sports enthusiasts. At Emanuel, the surgery averages 46,000 ($46,621). the same procedure at Legacy's Salmon Creek Facility in Vancouver is just shy of 32,000 ($31,892).
That's a difference of $15,000 - enough money to buy .... say ...This brand new car.
"Is there a a standard pricing regulation? No. There is none."

Ron Pollack is the executive director of the D.C. based Patient Advocacy Group "Families USA."

He's been critical of health care pricing for a lot of reasons -- but especially because he says higher costs don't translate to better quality of care.

Ron Pollack  "It's very hard for anybody to discern - have any sense of rhyme or reason -- as to why one hospital it costs twice or three times as much for the same service as it does in another place."

O. "what would you say to that? I would say, you really have to ask that specific hospital because to look at a raw data set and not understand the context of how those charges were established, I would have the same conclusion.)

That's Andy Van Pelt.
He's the Chief Operating Officer of the Oregon Association of Hospitals'.

He says the new federal database only tells **part of the story.

Van Pelt- It really comes down to understanding that specific hospital's purpose within their community, the demographic they're serving and why their cost structure is the way it is."

Providence, for example, has a flexible cost structure.
Its hospitals "automatically discount the charge to uninsured patients who qualify under the financial assistance policy."

Other hospitals provide specialty care like a burn or trauma center.
And some like OHSU invest heavily in state-of-the-art technology.
Then there's patient volume.

A small rural hospital that does a dozen joint replacements a year may have higher average costs than a hospital in a big city - that does hundreds.

Andy Van Pelt  "One community might have a really high Medicaid or Medicare population. Another might have a really high uninsured population so they're in this constant balancing act and how do you make health care viable in that community based on the patient population and the services that community is seeking."

Still, even Van Pelt admits it's an antiquated system.
With more Americans insured under the Affordable Care Act - he says a lot of hospitals will look to **stop shifting costs to the insured - meaning a more equitable approach to pricing.

Andy Van Pelt  "Our members would say, the hospitals in this state would say, we have an unsustainable model for delivering healthcare."

Margie "That's just the way it's always been. But that doesn't mean it's the way it has to stay."
Frustrated with the system herself,  Margie now doubles as a patient advocate.

Helping others navigate the complicated web of healthcare.
Margie  "This transparency that's coming into place, I think that is going to make a big difference for consumers."

To be fair, some hospital administrators say, the "Chargemaster" prices rarely reflect what hospitals *actually get paid for services.
Medicare and Medicaid are set up - so that they only pay a fraction of the bill.
*Private insurance companies *use the Chargemaster as a *starting point for negotiations - but *often pay reduced rates.
As for the un-insured, hospitals have systems set up to offer large discounts for them too.
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