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Study shows Hernando hospital fees substantially higher than state average

Oak Hill Hospital’s parent company HCA says the for-profit corporation offers charity care and uninsured discounts similar to those offered to private insurance.


Oak Hill Hospital’s parent company HCA says the for-profit corporation offers charity care and uninsured discounts similar to those offered to private insurance.

The average patient who gets a joint replaced at Oak Hill Hospital was charged nearly $119,000 in 2011. At Brooksville Regional Hospital, the average was $104,000.

Those fees were considerably higher than at several hospitals in the Tampa Bay area — and much higher than the state average of $62,092.

Chest pain? Oak Hill, owned by Healthcare Corporation of America in Nashville, charged $32,709. Brooksville Regional and Spring Hill Regional, both owned by Health Management Associates of Naples, billed $33,219. The state average: $21,396.

The trend continues throughout the reams of data released by the federal government this month. The report from the Centers for Medicare and Medicaid Services shows what 3,300 hospitals charged in 2011 for the 100 most common in-hospital procedures covered by Medicare, as well as what Medicare paid — a fraction of the hospitals' charges.

For patients covered by Medicare or private insurers, the charges mean relatively little, experts say. But they do matter to uninsured patients who pay their own way.

"Not only do they not have insurance, but they have to pay twice or even three times as much as somebody who's insured," said Jeffrey Harman, a health economist and associate professor at the University of Florida's College of Public Health.

That means Hernando County is an especially expensive place for uninsured patients to receive care — and there are plenty of them here. About 23 percent of Hernando residents younger than 65 do not have insurance, according to figures released recently by the Robert Wood Johnson Foundation.

Local hospital officials say the high costs don't keep uninsured patients from receiving quality health care. They say they help the uninsured pay what they can.

"We absolutely work with them," said Patrick Maloney, chief executive for Brooksville Regional and Spring Hill Regional hospitals. "At the end of the day, if they can't afford to pay us, what are we going to do?"

• • •

Experts say one reason for the vast differences in fees is the complex contracts that hospitals sign with commercial insurers, who historically have paid only a portion of the full charges. This created incentives for hospitals to raise their charges, even though most insurers have moved to reimbursements closer to Medicare's payment system.

Medicare does not pay the amount a hospital charges. Instead, the government uses a system of standardized payments to reimburse hospitals for treating specific conditions.

Government officials said that some of the variation in fees among hospitals across the country might reflect the fact that some patients were sicker or required longer hospital stays. A market force at work locally could be the limited choices for Hernando residents, Harman said.

But health care is a business, and hospitals seek to boost their bottom line, said David Goodman, a principal investigator for the Dartmouth Atlas Project, which documents variations in how medical resources are distributed and used in the United States.

"These rates are carefully thought-out actions as a way to maximize their revenue, but we need to be very clear it's not relevant for all patients," Goodman said.

Maloney suspects one reason why his hospitals charge more is that they instituted annual increases while others chose not to since the fees end up being such a small factor in what Medicare and private insurers pay.

As for uninsured and poor patients, hospitals write off bills for patients with incomes at or below 200 percent of the federal poverty guidelines.

For the uninsured who don't qualify, "we negotiate," Maloney said. "We take a deposit. We'll work a payment plan. They just have to meet with our financial team, and we work it out with them."

In 2011, the uncompensated and charity care provided by both of HMA hospitals amounted to nearly $90 million, Maloney said.

Oak Hill's chief executive officer, Mickey Smith, declined an interview request. A hospital spokesman referred the Times to a statement from parent company HCA, which notes that the for-profit corporation offers charity care and uninsured discounts similar to those offered to private insurance plans.

Oak Hill's charity and uncompensated care came to about $6.8 million in 2011 and nearly $8 million last year, according to figures provided by the hospital.

Just as the local hospitals charge more than the state average, the Medicare reimbursements are, on average, lower. That's due in part to a lower cost of living here, Maloney said.

He also noted that Hernando is not like some other Florida counties, which set up taxing districts to cover the cost of uninsured residents.

• • •

Though the figures released this month shed some light on past charges, they do little to help uninsured consumers who want to shop around now, Goodman said.

"All of the other things we need to pay for in life, we can get the price upfront," he said. "Your mortgage. Your car. You don't know what your health care costs are until after the fact."

Patients deserve that transparency, said Caroline Steinberg, vice president of trends analysis for the American Hospital Association.

"But what health consumers want to know is what is their deductible, what is their co-payment," Steinberg said. "So the transparency really needs to be a joint effort between the provider and the (insurance) plan, and in general the plan is really the entity that knows what the patient is expected to pay."

She said the uninsured who do not meet poverty guidelines should call local hospitals' financial advisers.

Maloney echoed that.

"I would absolutely recommend they call and ask what's the best price you can give me to come on an elective basis," he said.

Harman, the UF health economist, said the wide disparity in hospital fees is a sign of a "failed market" in need of government regulation.

"These charges being somewhat arbitrary and higher than what insurance companies are paying is really sort of sticking it to the uninsured," Harman said.

"Maybe charges shouldn't be higher than what insured would be. That would be my solution."

Reach Tony Marrero at or (352) 848-1431. Follow @tmarrerotimes on Twitter.

Hospital*Avg chargesAvg Medicare

Chest pain
Oak Hill$32,709 $2,928
Brooksville Reg.$33,219$3,398
State average$21,396$3,577
Heart failure and shock
Oak Hill$42,493 $5,380
Brooksville Reg.$41,387$6,218
State average$30,027$6,310
Joint replacement
Oak Hill $118,735 $11,639
Brooksville Reg.$104,033$12,777
State average$62,092$12,789
Kidney and urinary tract infections
Oak Hill$41,597$4,096
Brooksville Reg.$35,591$4,657
State average$25,549$4,912
Simple pneumonia
Oak Hill$50,339 $5,670
Brooksville Reg.$47,554$6,035
State average$33,575$6,347

* Figures for Spring Hill Regional Hospital align with Brooksville Regional's because both are owned by HMA and operate under the same license.

Source: Centers for Medicare and Medicaid Services

Study shows Hernando hospital fees substantially higher than state average 05/17/13 [Last modified: Monday, May 20, 2013 1:49pm]
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