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Hospital Charges

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Hospital Charges

Hospitals must do a better job of explaining the difference between "charges" and what hospitals actually get paid for procedures.

News coverage recently has focused on the wide variation among hospital charges.  But that focus is misdirected, because most hospitals get paid only 30-40 percent of their charges.  WakeMed collects an average of 31 percent of all charges submitted.

The public policy debate needs to cut to the core of who is actually going to pay what and why. That's what the consumer wants to know.

For example, a hospital might "charge" $1 for an aspirin.  Obviously, that looks ridiculous.  But here's how that happens: the federal government says hospitals cannot have a separate line item for items like nursing care, kitchen staff, housekeepers, doctors, switchboard operators, etc.  Nor can they have line items for medical technology, food, telephones, TV, electricity, linens, pillows, mattresses, beds, cleaning supplies, etc. 

As a result, all of these costs get rolled into the medication, supplies, and procedures listed on a "charge" statement.

Take the aspirin example.  A doctor orders an aspirin.  A nurse inputs the order. The pharmacy tech fills it. The pharmacist checks it. Then the nurse delivers it to the patient.  The costs of all those services - and the technology involved in keeping accurate records - are rolled into the charge for an aspirin. 

This is obviously a confusing system to patients.  They deserve better.