4 ms·
Probably not going to get seen in this morass of comments, but I went back and reviewed the CMS data that the article cites. The article used the Diagnosis Rel
by riahi 13y ago
Probably not going to get seen in this morass of comments, but I went back and reviewed the CMS data that the article cites.
The article used the Diagnosis Related Group (DRG) 238 - Major Cardiovascular Procedures without Major Complications. This is the best guess at capturing the costs of "Open Heart Surgery". (CMS only releases data for the top 100 DRG codes). "Open Heart Surgery" is a term for a variety of surgical procedures done on the heart, including valve replacement, vascular repairs of the aorta/vena cava/pulmonary vessels, and coronary bypass. These span a wide variety of DRG codes, including 216-221 for valve replacement, 228 (other cardiothoracic procedures with major complications), and 231-236 for cardiac bypass. Assuming we are comparing the operation known as coronary bypass grafting, then 238 is a decent enough code to use, with the proviso that it's not the best source for data.
Looking at the numbers claimed: If you download the Excel file from CMS [1], you can sort by DRG and Provider Name. Yes, if you search by DRG 238 and filter by Cleveland Clinic you will get $106,385 charged to Medicare. However, what the article completely leaves out (and anyone in medical practice will assume) is that Medicare simply does not pay the amount covered. Average Total Payments by Medicare: $26,898. That's how much Cleveland Clinic gets reimbursed, on average, by Medicare for any procedure included in DRG 238.
It gets more interesting when you include all providers and sort by average total payments. The highest average Medicare reimbursement to anyone for DRG 238 is $54,682; the lowest $13,233. Another interesting example:
In Alabama, at Brookwood Medical Center, DRG 238 covers $111,008 and only reimburses $15,552.
These comparisons of the US system to outside countries really need to compare average US reimbursement to their stated cost, because they sure aren't funding an army of administrators to get the insurance companies to pay up.
In summary, you can get "open heart surgery" in the US (Alabama) for "$15,552". I wonder what the Alabama price is if you walk in and offer to pay cash. If you can get it at the Medicare reimbursement rate, that compares decently to the Indian price.
[1] http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Inpatient.html http://www.cms.gov/Research-Statistics-Data-and-Systems/Stat...
- refurb 13y agoNice catch! You are correct, it's the reimbursement that counts, not what the hospital claims are its expenses! The differences in payment between the hospitals is due to the DRG payment adjustments for local cost of living, disproportionate share, etc.
- phaemon 13y agoWhy does the clinic charge that much to Medicare, if Medicare doesn't pay that much (legally, I presume)? Is it an accounting trick or something?
- apalmer 13y agoWell, probably a variety of reasons but certainly one key reason is... if you have to ask for 100K to get 25K, then if you ask for 25K your only going to get 8K?... All prices are always negotiable, just that the individual consumer is so used to not having bargaining power that they forget this fact.
- jonknee 13y agoMedicare does not negotiate. The hospitals break down bills into CPT codes and get paid the published rate for the period for codes that are accepted (including geographic indexes and what not). It's a mess.
- refurb 13y agoThe amount charged to Medicare does have an impact on how much they are reimbursed (to an extent). For example, if the charges exceed the DRG payment by a specific amount, the hospital can get an "outlier" payment to help with the excess costs. As for how the charges are calculated, hospitals have a lot flexibility in how costs are accounted for. Also, keep in mind that hospitals that specialize in a specific procedure often have high volumes that drive down cost. If you're getting heart surgery at a hospital that specializes in it, it's often much cheaper than a hospital that rarely does heart surgery.
- ceol 13y agoIt really is such a shame your comment was almost halfway down the page while the top comments continue to be towing the "US healthcare is awful and greedy!" line. Thanks for combing through that data for us.