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More About Hospital Charges
The amount a hospital bills a patient is known as a charge. CHRISTUS hospitals charge patients who have the exact same treatment the exact same amount, whether they are insured or uninsured.
Commercial insurance companies or other entities that purchase health care services negotiate discounts with hospitals on behalf of the patients they represent. In fact, government-sponsored insurance payers like Medicare and Medicaid often pay the hospital less than what it costs the hospital to provide care to their patients.
However, there are many reasons that charges may differ between hospitals and even patients. Charges vary because no two patients, time of recovery, reactions to medications or treatment, or physicians are identical. Some of the more common reasons charges vary include the following:
Differences in patients
Severity of illness
The charges of two patients with the same diagnosis may differ because one may have complications, more than one disorder or disease occurring at the same time or other related difficulties, and may need more service or staff attention.
Length of hospital stay
Longer hospital stays are likely to result in higher charges. Some patients, especially very ill ones, may not respond as well to treatment or surgery and may have to stay in the hospital longer.
Emergency admissions
One-third or more of hospital patients come through the emergency room. The costs of emergency services are included in patient charges.
Differences in physicians
Physicians make decisions about their patients’ treatments based on each patient’s individual needs. Some doctors may order different kinds of diagnostic tests or prefer different treatments. These will also influence hospital charges.
The education, training and experience of each physician can vary significantly, and physicians may involve other physicians in consulting roles. In these situations, hospital charges can be generated by more than one physician for the same patient.
Differences in hospitals
Physician and professional fees
Physician charges, including those of surgeons, anesthesiologists and radiologists, are normally not included in hospital charges. Most physician fees will be included in a separate bill. However, hospital charges may or may not include laboratory work, x-rays and other services performed. Whether or not these services are included in the hospital charge or on the same bill varies by hospital.
Technology
The equipment hospitals use differs in age, sophistication and frequency of use. Hospitals with the latest technology may have higher charges than those with older, less sophisticated equipment.
Types and range of services
Hospitals often offer different levels of care and specialize in one or more types of services. For instance, a hospital may specialize in heart procedures or psychiatric care, and may show higher median charges than other hospitals for these services because of the expense involved in treating severe cases. Also, hospitals differ in the range of services they provide to patients. Some may provide the full range of services required for diagnosis and treatment during the stay. Others may stabilize patients and then transfer them to another hospital for more specialized care.
Service Frequency
The per-patient cost of services is generally higher if the type of hospitalization occurs infrequently at the hospital. Services that are used less may cost more.
Hospital cost structures
Hospitals differ in their approach to pricing based on operational costs. Some hospitals try to spread the cost of all services and equipment among all patients. Others establish charges for specific services based on the cost to provide each exact service. Also, some hospitals may decide or be forced to lose money on certain services, while other services are priced to make up that loss. Any of these situations can result in significantly different charges among hospitals for a given diagnosis or type of service.
Capital expenses
Hospitals differ in the amount of debt and depreciation they must cover in their charges to patients. A hospital with a large amount of debt, a new building or major renovation may have higher charges than a hospital not facing such expenses. Furthermore, hospitals may choose to lease or purchase equipment or facilities. How hospital leadership choose to finance large projects may affect charges in different ways.
