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Confusing cost of hospital care

Same procedure, wild swings in cost based on the hospital where you have it done.  That's the finding of a new report based on Medicare data.  Researchers looked at the costs of one-hundred common treatments at hospitals across the country.

The report shows a cloudy picture of how hospitals come up with the numbers but consumers can use it to see where to find the least-expensive procedures.  The government did it in the name of transparency ahead of big changes to healthcare.

"It's very difficult for a hospital, even myself today, to say that these charges don't matter, because they do appear on a patient's bill," Dan Rinaldi, CFO of Ellis Medicine said.

The numbers can be dramatically different from one hospital to the next.

"If you ever wanted to see how we can save money in healthcare without hurting people's benefits this is an example," said Sen. Charles Schumer (D-NY).

Take these examples: For major joint replacement surgeries the average covered cost at Albany Memorial is $26,000.  17 miles away at Ellis, the bill reads $55,000.

Why would one procedure at one hospital be a different price than it would be at another?  "You'd have to compare Albany Memorial's costs with Ellis," Rinaldi said.  "For example, Ellis has residency, Albany Memorial does not."

These are average covered charges -- what the hospital asks for.  The most serious cases of heart failure and shock draw wide disparities, too, from $13,000 at Albany Memorial to $63,000 at Albany Med.

These are the prices patients are charged, and you can pay that if you're uninsured.

"I would say almost 99.9 percent of anyone never pays those charges to our hospital," Rinaldi said.

The hospital typically receives a lot less from what you, your insurance company, and Medicare pays out on average.

Ellis suggests the difference in charges could be for simple reasons.  It could be that the buildings, newer versus old, quite frankly it could mean one hospital is more efficient than the other, Rinaldi said.

Albany Med responded with the following statement: "The residents and community hospitals throughout our 25-county service area rely on Albany Med for highly specialized, quality medical and surgical care 24 hours a day, every day of the year. As the only trauma center and academic medical center for the region, Albany Med has a unique role in bringing the most advanced technology to our region, meeting the needs of patients regardless of complexity and supplying the region with educated, skilled physicians, and these factors are recognized in Medicare reimbursement rates." 
 
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