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Hospital Report

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The premier resource for hospital professionals from Relias Media, the trusted source for healthcare information and continuing education.

ED visits: Should patients comparison shop?

March 18th, 2015

With health care costs increasing, and the majority of the costs distributed to the individual/patient, researchers decided to study variation in charges among hospitals, in particular the emergency departments (EDs) of these hospitals.

The study, published online, was a cross-sectional look at the variation in charges for ED visits in California hospitals. It focused only on those charges reported to California Office of Statewide Health Planning and Development by nonfederal, acute care hospitals.

To understand the billing process, all charges are categorized into 5 levels:

  • level 1 visits are minimal risk (i.e., suture removal);
  • level 2 visits are low risk (i.e., ankle sprain);
  • levels 3 and 4 are moderate risk (i.e., exacerbation of chronic or acute illness); and
  • level 5 visit is high risk (i.e., chest pain or shortness of breath).
Researchers found a wide range in charges for the same ED visit levels in California hospitals during 2011. For example, researchers found:
  • charges for level 2 visits ranged from $156 to $1,422;
  • charges for level 3 visits ranged from $266 to $3,130; and
  • charges for level 4 visits ranged from $275 to $6,662.
All in all, researchers found a 54% variation in prices among hospital EDs, with only 30%-41% explainable by researchers. Some of the explanations included:
  • government hospitals charged significantly less than nonprofit hospitals;
  • hospitals with higher proportions of Medicaid patients charged more; and
  • hospitals that paid higher wages charged more.
“The acute nature of most ER visits limits a patient’s ability to shop for lower cost or in-network emergency care, which makes the magnitude and variation in charges quite concerning,” said lead study author Renee Hsia, MD, MSc, of the University of California San Francisco, San Francisco, Calif. “There is actually less variation in charges for consumer electronic goods than there is for emergency medical care.”

“The largely arbitrary charge-master system in hospitals has a major bearing on the cost of medical care,” said Dr. Hsia. “The lack of systematic charge setting can have especially devastating effects on uninsured or out-of-network patients facing the full bill for their care.”