It turns out that Florida, California, and Texas have the largest number of hospitals on the list
Are you curious about which hospitals in the United States charge the highest prices? A new list of the 100 most expensive U.S. hospitals has the answers. The list was compiled in an effort to provide greater price transparency. Not surprisingly, the highest-priced hospitals are likely to also have some of the highest clinical laboratory test prices.
The study was conducted by National Nurses United (NNU), the largest nurses union in the country, and the Institute for Health & Socio-Economic Policy (IHSP). Researchers used the information from Medicare cost reports that included hospital charges and costs for fiscal year 2012.
Price Transparency Trend Will Involve Medical Labs and Pathology Groups
The NNU-IHSP study is a reminder to pathologists and medical laboratory administrators of the power of price transparency. This information is available for review and analysis by patients, insurers and other healthcare decision-makers to help them choose providers offering the most value.
Medical laboratories, as gateways to healthcare organizations, should be preparing to field inquiries about the cost of lab testing from consumers. As this list of the 100 most expensive hospitals demonstrates, it is smart business to anticipate how price information may be used against high-cost providers.
Most Expensive Hospitals and System Affiliation
The average charge-to-cost ratio among U.S. hospitals is 331%, according to the findings outlined in the NNU-IHSP news release. The full list of 100 most expensive hospitals is available as a PDF. The rankings were based on charge-to-cost ratios. Below are the top 10 hospitals on the list:
- Meadowlands Hospital Medical Center, Secaucus, New Jersey.
- Paul B. Hall Regional Medical Center, Paintsville, Kentucky.
- Orange Park Medical Center, Orange Park, Florida.
- North Okaloosa Medical Center, Crestview, Florida.
- Gadsden Regional Medical Center, Gadsden, Alabama.
- Bayonne Medical Center, Bayonne, New Jersey.
- Brooksville Regional Hospital, Brooksville, Florida.
- Heart of Florida Regional Medical Center, Davenport, Florida.
- Chestnut Hill Hospital, Philadelphia, Pennsylvania.
- Oak Hill Hospital, Spring Hill, Florida.
Meadowlands’ charge-to-cost ratio was 1,192%, which means it essentially charged $1,200 for every $100 of total costs, explained an article in Beckers Hospital Review.
Analysis by Beckers Showed That For-Profit Hospitals
Dominated the List
An analysis of the report by Beckers showed that for-profit hospitals dominated the list—each of the 21 highest with the highest charge-to-cost ratios were owned or operated by an investor-owned operator. And the most cited systems, Beckers said, were: Community Health Systems, Franklin, Tennessee; Health Management Associates, Naples, Florida; Tenet Healthcare Corp., Dallas Texas; and Hospital Corporation of America, Nashville, Tennessee.
Conversely, at municipal hospitals and other government-owned hospitals, the average charge-to-cost ratios is 235% compared to 503% at for-profit hospitals, the Beckers article pointed out.
Other report findings, outlined in the news release, are:
- Hospital charges increased 22 points in 2011.
- From 2009 to 2011, hospital charges increased 16% while costs increased 2%.
Location, location location—80% of Expensive Hospitals in Six States
A Dark Daily review found that, according to the NNU-IHSP report, the largest number of the 100 most expensive hospitals are located in six states. In fact, these six states—geographically dispersed throughout the U.S—are home to about 80% of the hospitals on NNU-IHSP’s list of the top 100 most expensive hospitals.
States that have majority of most expensive hospitals, according to the report:
• Florida: 31 hospitals
• California: 12 hospitals
• Texas: 12 hospitals
• Pennsylvania: 10 hospitals
• Alabama: 7 hospitals
• New Jersey: 7 hospitals
“High hospital charges get passed along by insurance companies to employers and individuals,” stated Deborah Burger, R.N., Co-President of NNU.” Employers drop health coverage or shift the burden of cost to workers, many of whom then must choose between getting the care they need or paying other bills in a still stagnating economy for so many.”
In California, the state identified by the report as having the second highest number of hospitals on the nation’s top 100 most expensive list, employers are dropping healthcare coverage to their employees, according to a report released last year by the California Health Foundation & Trust (CHFT).
This study showed that health insurance premiums rose 170% over 10 years. About 60% of California firms offered health benefits in 2012. That was down from 73% in 2009, reported CHFT, an affiliate of the California Hospital Association.
“Hospital care is extremely expensive to produce and to have available for everyone in the community,” said Warren Browner, M.D., Chief Executive Officer of California Pacific Medical Center in San Francisco, in an article published last year by The New York Times.
A Strong Defense: Hospitals Ready to Speak on Prices
He is not the only expert prepared to defend hospital prices.
A Price Transparency Report by the Healthcare Financial Management Association (HFMA) found more than half of the financial leaders who responded would defend and explain their organization’s charges if those charges were made public or transparent.
Sixteen percent in the HFMA study said they could not defend charges, and 28% indicated they were unsure about it.
HFMA’s study said these pricing strategies are defensible:
- Charges in direct relation to cost (72%)
- Charges in line with other comparable hospitals (66%)
- Charges in line with hospitals in same market (61%)
- Charges generate appropriate level of net revenue for reinvestment and operational enhancement (50%)
Hospital Pricing Is a Game of Numbers and Words
Finally, a word on nomenclature. Prices are often associated with numbers on a provider’s chargemaster—a sort of hospital price card. This can be a confusing data source as consumers may not pay the charges listed. It’s similar to shopping retail. How often does someone pay the manufacturer’s suggested retail price (MSRP)?
Officials in the hospital industry are quick to point out that health insurers may negotiate lower prices with individual hospitals and Medicare pays a set amount to hospitals.
What is instructive about publication of a list of the top 100 highest-priced U.S. hospitals in the is that it is an early warning to clinical laboratories and pathology groups that they do not want to be the outliers on the highest price end of the bell-shaped curve.
Also, detailed information about provider prices and outcomes is becoming more accessible to consumers. That is another reminder that it is probably good business for medical labs to harmonize their prices with local market indicators and comparable providers.
—By Donna Marie Pocius