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Government report shows region's hospitals' charges vary for same treatments

May 13th, 2013 9:03 am by Madison Mathews

Editor's Note: An earlier version of this article misstated the average amount Johnson City Medical Center charged for simple pneumonia. The errant figure was taken from an adjacent line on the report regarding more complex pneumonia treatment. The Johnson City Press apologizes for the error.
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In 2011, Johnson City Medical Center charged an average of $20,803 to treat a patient with simple pneumonia, while Franklin Woods Community Hospital charged an average of $26,406 for the same thing.
Sycamore Shoals Hospital, which is located about nine miles from JCMC, charged an average of $20,311 to treat pneumonia patients.
These figures were taken from the federal government’s release of Medicare provider charge data Wednesday.
Comparatively, figures show the average charge for pneumonia treatment at Nashville’s Vanderbilt University Medical Center was $41,838, while the University of Tennessee Medical Center in Knoxville charged on average $24,193 to treat pneumonia patients.
Across the region at Kingsport’s Holston Valley Medical Center, the average charge for chest pain treatment was $11,065, while Bristol Regional Medical Center charged $10,643.
That’s a major difference from the $15,580 JCMC charged for treatment of chest pain in 2011.
The data includes hospital-specific charges for more than 3,000 hospitals across the country and represent the top 100 most frequently billed discharges.
The average charges were calculated at the individual hospital level.
While the charges don’t represent the amount that is ultimately paid by either the federal government or the patient, the figures do show a significant price difference between hospitals in the region, the state and across the country.
Local health care officials from both Mountain States Health Alliance and Wellmont Health System said they are glad the information is in the public eye.
“We’ve always been on the side of more transparency is good from just a Mountain States perspective, so we certainly applaud the federal government for getting this information out,” MSHA Chief Financial Officer Marvin Eichorn said.
Alice Pope, chief financial officer for Wellmont, said she was pleased with the data’s release because it shows Wellmont offers lower charges for patients in the region.
“We think what it shows is the value proposition for Wellmont Health System. It shows that we do have lower charges than our competitor in the market,” she said.
As for the average charge differences between hospitals in the same system, Eichorn said it could be any number of reasons, including length of patient stay and the number of tests and procedures performed by physicians.
“There’s any number of reasons why charges between hospital A and hospital B for the exact same (diagnosis-related group) may be different — in some cases substantially. Sometimes it could be 150-200 percent different in some of them,” he said.
For example, the average charge for treatment of esophagitis, gastroenteritis or other digestive disorders at JCMC was $16,444, while the same treatment at Franklin Woods was an average of $14,046.
While the amount each hospital charged Medicare varies from facility to facility, there is a system-wide standard price for specific services. The same is true for Wellmont facilities.
Approximately 44 percent of Mountain States’ patient population is covered under Medicare, while about 55 percent of Wellmont’s business is based on Medicare patients.
As more and more of this type of information is released, Pope said it will help add to the transparency between health-care providers and patients.
“What we believe is that it tells the story that Wellmont Health System has to offer to our communities in that we have not raised our charges beyond reasonable amounts. ... We certainly welcome transparency within the health-care space. We think it’s a good thing for the communities. We think it’s a good thing for patients, for employers, so it’s certainly not something that we’re afraid of,” she said.
To view the data, visit http://go.cms.gov/16WaMfH.

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