The average sticker price to get a pacemaker at Des Peres Hospital is $74,953. About eight miles away, at St. Luke’s Hospital, it’s only $31,530.
That discrepancy between how two St. Louis-area hospitals price their services is echoed across Missouri and the United States in new data released Wednesday by the federal government.
The information, posted online by the Centers for Medicare & Medicaid Services, or CMS, focused on “average covered charges” for 100 of the mostly commonly billed medical conditions and procedures among the elderly and disabled, including the implantation of a pacemaker for a weak heart.
A hospital’s retail sticker price, or average covered charges, represents the dollar amount that hospitals bill for a particular service. Medicare, which pays a much lower rate, reimburses hospitals at rates that are closer to a hospital’s actual costs for delivering the care.
At some Missouri hospitals, hospital sticker prices for certain medical conditions and procedures are more than 10 times the average Medicare reimbursement paid to that particular hospital for similar treatment. At many other hospitals statewide, the differential is often four or five times the Medicare rate.
Medicare rates are adjusted for regional differences in labor prices. A hospital may also be reimbursed at a higher rate for treatment if it manages a sicker population of patients or serves a disproportionate share of Medicaid and uninsured patients. Academic teaching hospitals and those hospitals with costly capital improvement projects also receive a higher reimbursement rate.
“The average Medicare patient is not going to pay these set charges, but patients who are uninsured or underinsured may be responsible for either paying the charge or negotiating the price downward from that high mark, ” said Brian Cook, a CMS spokesman in Washington. “Each insurance company negotiates with each health system or hospital.”
Among St. Louis-area hospitals, those owned by Tenet Health Care Corp., a Dallas-based for-profit health care system, appear to have some of the highest average charges for fiscal year 2011 — the latest year available.
For example, Des Peres Hospital, a Tenet property, has one of the highest local sticker prices for pacemakers without complications, as well as for “major joint replacement with complications” ($103,813) and for heart attack care with complications ($62,017) — or, as the federal diagnostic code reads: “acute myocardial infarction, discharged alive with MCC (major complications).”
St. Louis University Hospital, also part of the Tenet chain, has the highest local sticker price for spinal fusion (excluding cervical fusion) with complications: $174,720. And its sticker price for “major small and large bowel procedures with complications” was the area’s highest, at $216,053 — a procedure that Medicare paid the hospital on average $50,663 for fiscal year 2011.
“The pricing is confusing and complex, ” said Laura Keller, a spokeswoman for SLU Hospital. She said the federal data are somewhat misleading because the hospital established a policy several years ago not to gouge the uninsured.
Consumers weigh many factors in addition to cost when they seek medical care, she said.
“It may be more appropriate to choose a hospital based on a particular physician who specializes in what the patient is dealing with, ” Keller said.
Chesterfield-based Mercy Health, a nonprofit Catholic health system, also has some of the St. Louis area’s highest sticker prices.
For example, Mercy St. Louis Hospital in Creve Coeur has the second-highest average covered charges in the St. Louis area for treating simple pneumonia with complications ($45,738), the third-highest sticker price for treating heart attacks with major complications ($55,558), and the third-highest for implanting a pacemaker without complications ($47,256).
“The cost of care represents the total cost of operating the hospital, not just the discrete services provided to individual patients, ” Mercy said in a written statement. “Charges must also cover a portion of the cost of uncompensated care provided to patients, and the costs of staff and technology required around-the-clock to meet the needs of patients and the community.”
There are also price disparities among some hospitals that are owned by the same health system. Hospitals that frequently perform a procedure usually charge less for it, rural and urban hospitals have different cost structures, and federal adjustments may affect the actual amounts paid.
For example, Christian Hospital has some of the highest charges in the BJC system; Missouri Baptist Medical Center has some of BJC’s lowest charges.
“Some of the variations among BJC hospitals are a factor of history. Hospital charges were set long before BJC was formed ... 20 years ago, ” said BJC spokesman June Fowler. “A hospital that serves a patient population where you have more uninsured or underinsured patients gets factored into charges” that are higher.
St. Mary’s Health Center in Richmond Heights, which is operated by Creve Coeur-based SSM Health Care, had the second-highest sticker price for pacemaker implants without complications ($54,239) in the St. Louis area.
“All of our hospitals have the same master charge list, ” said SSM spokeswoman Kristen Johnson. “The difference we’re seeing between our hospitals is different case mixes, depending on a patient’s acuity level or co-morbidity, which will drive the costs up or down. Some people will have more severe needs and costs will reflect that.”
Gateway Regional Medical Center in Granite City had the St. Louis area’s highest average covered charges for patients diagnosed with simple pneumonia with major complications ($86,571) and patients discharged alive after a heart attack ($126,720). Gateway Regional officials were unavailable for comment.
Across the region, Poplar Bluff Regional Medical Center had some of the highest sticker prices.
Poplar Bluff, which is owned by Naples, Fla.-based Health Management Associates, had one of Missouri’s highest average sticker prices for a medical condition: $218,307 for “respiratory system diagnosis with ventilator support 96 hours plus.” According to federal data, Medicare paid that hospital on average $36,766 for 15 of those cases in fiscal year 2011.
“There’s a lot of factors that play into that charge piece, ” said Tiffany Jenkins, marketing director for Poplar Bluff. “We’re not getting paid anywhere near that amount, and neither does any other hospital. ... The uninsured get a 60 percent discount at minimum.”
Jonathan Blum, a CMS deputy administrator, said the goal of releasing the data was “to make the health care marketplace more transparent, ” to help the uninsured and “hopefully over time (to) reform a complicated marketplace.”
What the data show
The federal Centers for Medicare & Medicaid Services made public on Wednesday data regarding hospital charges for 100 of the most commonly billed medical conditions and procedures for the elderly and disabled.
The huge database shows wide variation between hospital sticker prices — or "average covered charges" — for similar medical treatment, as well as significant differences between a hospital's list price and its reimbursement by Medicare.
For example, Mercy Hospital St. Louis's average covered charges for 42 patients in 2011 diagnosed with "infections and parasitic diseases (and who had) operating room procedure and major complications" was $189,868. Medicare's payouts averaged $47,129 for these cases.
Hospitals often use the so-called "charge master" as a starting point for negotiations with private insurance companies and to offer discounts to uninsured or under-insured patients.
The federal data base is available by double-clicking on this link: http://bit.ly/11kYhJK