SCCH&HC POLICY POSITION 2007
Hospital Pricing Transparency

Background

In an era of increasing health care costs and consumer-driven financing alternatives, the need for pricing transparency in health care services has taken on increasing importance. Sioux Center Community Hospital & Health Center (SCCH&HC) is committed to sharing information in ways that will help make informed decisions about health care services. However, issues surrounding hospital pricing remain complex and include many factors. SCCH&HC prices vary based on patient needs and the level of services consumed. A wide range of products and services are bundled into the price of a particular hospital service, including medications, supplies, tests and more. Hospital "reimbursement" varies from patient to patient based on the payments mandated by different insurance companies, health plans, and government payers such as Medicare and Medicaid. All of these factors combine to make specific advance pricing information difficult to provide on an individual basis.

SCCH&HC is at the forefront of providing meaningful consumer information, with the continuous goal of providing efficient and effective outcomes for all patients. SCCH&HC supports the goal of pricing transparency for health care services.

Goal of Pricing Transparency

The goal of pricing transparency is to provide useful information about SCCH&HC and other health care facilities on a comparative basis across the various services provided.

SCCH&HC Position

SCCH&HC is committed to public information and accountability. SCCH&HC charge information can be found via the Iowa Hospital Association (IHA) website, www.ihaonline.org. This will allow either basic or more advanced searches of charges associated with hospital inpatient and outpatient services, as well as provide the opportunity to compare hospitals to one another.

In addition, the Web site will also allow access to various other information, including hospital quality indicators (via the Iowa Healthcare Collaborative), community benefit services, economic impact data and the IHA principles on billing and collection policies which every Iowa hospital board has endorsed.

While this is a significant first step in the arena of health care pricing transparency, consumers should recognize that charge data is not indicative of the price that a consumer will actually pay for services. Consumers should contact their insurer or individual hospitals regarding the specifics of their health care coverage options. In addition SCCH&HC recommends that the following information be taken into consideration:

State and federal underpayment for services.

When both Medicare and Medicaid programs do not adequately cover the cost of providing care to those beneficiaries, it impacts charges for the private sector. Currently, nearly 60 percent of the patient care delivered in Iowa hospitals fall under either Medicare or Medicaid. Iowa continues to receive one of the lowest hospital reimbursement rates in the nation from Medicare and given federal requirements, Medicaid payments are actually below Medicare rates. Individual hospital patient mixes, including the amount of charity care provided, directly affect charges.

The role of the payer community.

Because traditional insurance typically covers most of the cost of hospital care, consumers with this type of coverage are more likely to be interested in what their personal out-of-pocket costs would be between hospitals, rather than overall hospital charges. Iowa insurance companies should follow the same path as the provider community in making consumer out-of-pocket obligations publicly available on the comparative basis as well as the differences between payments to individual hospitals.

The role of other health care payors.

SCCH&HC is committed to responding to the needs of individuals, beyond those with traditional insurance coverage. Consumers who have HMO coverage have agreed in advance to limit their choice of hospitals and physicians and will have less need for specific price information. However, consumers with high deductible health savings accounts (HSAs) will probably be most interested in specific price information including ambulatory care and physician visits where they could be responsible for paying the entire cost of care.

People without insurance who have limited means of paying for health care will want to compare information, but ultimately will need to work within the charity and discount policies that are available.

Refund Policy

Hospital accounts will be worked monthly to determine refunds due to the patient. After it has been determined that the refund is truly due to the patient, the accounts receivable clerk will check to make sure that neither the patient nor anyone in the family has an outstanding balance. If they would, the refund amount would be applied to the outstanding account. If there are no outstanding balances, the AR clerk will turn over the refund journal to the Accounts Payable clerk to issue the refund checks to the patients.

Transparency in the vendor community.

Many costs related to hospital pricing are outside the control of the community hospital. These include the product mark-ups for device manufacturers, pharmaceuticals, and other medical service providers. These vendors should also be encouraged to supply a transparent price list to the Iowa consumer to help individuals recognize the costs associated with various services and procedures.

SCCH&HC is committed to quality healthcare. Our continued efforts in transparency will be focused on improving the quality of care with consciousness to the costs for our customers. Please contact us at 712-722-8102 for assistance.