Hospitalists Unaware of Treatment Costs for Inpatients

Christopher Cheney, July 30, 2010

How much does an overnight stay in the ICU cost? $750? $6,000? Haven't got a clue? Many hospitalists don't know either. The cost of an ICU bed per night is $1,107, according to a recent study of two Washington hospitals. The $750-$6,000 range was what physicians at those facilities guessed.

Even though proponents of the hospitalist model have long claimed that hospitalists cut costs, hospitalists are unaware of the actual costs of care to inpatients, according to “Hospitalists’ awareness of patient charges associated with inpatient care,” published in the May/June issue of the Journal of Hospital Medicine. The study indicated that, in some cases, hospitalists were off by thousands of dollars in their estimates of how much tests and procedures cost the patients.

The guessing game

Researchers from the Internal Medicine Residency Faculty Group in Spokane, an affiliate of the University of Washington, asked hospitalists how much a hypothetical unadjusted self-paying patient would be billed for commonly used services, procedures, tests, and physician charges. Out of the 26 completed hospitalist surveys, researchers found that only a tenth of them were within a 10% accuracy rate.

“Their guesses were not very close, in general, to the so-called ‘true price’,” says Jeremy D. Graham, MA, DO, internal medicine residency Spokane faculty, clinical assistant professor of medicine at the University of Washington School of Medicine, and lead author of the study.

Hospitalists could generally distinguish which services were more expensive relative to each other but could not pinpoint a correct price. For example, they knew that a CT scan was more expensive than a chest x-ray, listing them in the correct cost order. But when asked to name a price for a CT scan, hospitalists estimated anywhere from $150 to $1,800; the price of a CT scan is actually $2,204.

The study indicates that the in-the-trenches physicians do not have a solid grasp on pricing for the services they use everyday. Why? Hospital charges are established on a confidential pricing structure based on contracts between the hospitals, insurances, and vendors and not on the actual costs of the services delivered, according to Graham.

Because healthcare prices are, in reality, adjusted, researchers gathered data from the hospital departments to create an “intellectual tool” of an unadjusted list of charges for the purposes of this study.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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