Cost of hospital care is very, very confusing

Clinton Herald Editorial

February 01, 2007 12:00 pm

— Monday’s front page featured three stories about the cost of medical care, centered around a new Web site produced by the Iowa Hospital Association that aims to allow comparison shopping for hospital treatments.
In a free market society, it may seem ideal to let patients treat hospitals like a retail store, shopping around for the best price in order to save a buck here and there. However, medical care is much more complicated than that, as the staff at Mercy Medical Center–Clinton can attest.
As explained by Paul Mangin, Mercy’s vice president of finance, the PricePoint Web site is at one useful and intimidating. It categorizes its price information based on some 800 ailments that require hospital care. But a lot of the information is based on averages — average age of patients, average length of stay and so on. And it doesn’t always factor in other services that may have been provided.
For example, one person’s hip surgery might have been more expensive based on a complicating factor such as hemophilia or diabetes that wouldn’t apply to all patients. Numbers like that can skew the average.
Furthermore, very few people simply pay for medical care out of pocket. Almost always health insurance is involved, or something like Medicare and Medicaid, which means the actual cost to an individual patient can vary greatly based on coverage.
Mercy President/CEO Donna Oliver also weighed in on the complexities of pricing out hospital care. She’s concerned with a federal formula that reimburses Iowa hospitals at a rate that’s 49th out of 50 states. Then of course there are patients who can’t or won’t pay for medical care… it ought to be clear by now that this isn’t the same as knowing how much a gallon of milk costs at Hy-Vee, Jewel and Fareway.
But still, Web site’s like PricePoint are an important step in helping the consumer make educated choices. Health care is something everyone needs and one of the biggest headaches for the state and federal governments. The insurance business is a behemoth that sometimes appears too big for its own good, but it’s the only real system we’ve got and can’t be abandoned until a better solution is found.
The topic is confusing, to be sure, but having these conversations and exposing the many factors that boggle the mind are the best way to work toward getting everything cleared up for future generations.