What matters is not how much Florida hospitals charge, but what Floridians pay

in Statewide by

There has been a lot of debate about hospitals, patients, the uninsured, and the underinsured here in the Sunshine State the past few months.

And our legislators just blew another chance to take advantage of $50 billion in federal funds to make sure the 800,000 to 1 million low-income Floridians without access to affordable health insurance have hope for relief in the next year.

Instead, insured Floridians and businesses pay the hospital costs for those who cannot afford to pay for their care — to the tune of $3 billion in 2012 alone.

Meanwhile, Rick Scott is suing the federal government over the Low Income Pool dollars that have been used in the past to support some of this care.  And he’s launched a commission to review hospital finances.

We’ve had academics, groups on the right and the left, the hospital industry, businesses, patients all weighing in.

There’s been lot of information for Floridians to sort through. The latest to hit our twitter feeds is a study from Health Affairs released just yesterday “The Fifty US Hospitals with the Highest Charge-To-Cost Ratios.”

Not surprisingly, Florida is leading the pack with 20 of the top 50 hospitals.

While this study goes to great lengths to sensationalize hospital charges and bolster its premise that these charges are driving a rise in healthcare spending, let’s slow down before the finger wagging begins and take a look at the facts.

Everyone knows that the system is in need of an overhaul and the hospital charges are not the amount that is actually paid for medical services.

Ironically, this latest study is coming from the same publication that noted an earlier Health Affairs piece, “At one time billed charges did matter…However, beginning in the early ’80s, payments became divorced from charges…”*

Just last year, Melinda Beck in The Wall Street Journal noted that “…(M)any hospital executives dismiss those list prices – also known as chargemaster prices – as meaningless and misleading since few patients ever pay them … There is a movement afoot in the industry to simplify the hospital bills and draw the eye to what often matters most to the patient: how much you owe…”

So, here’s the ah-ha moment, it’s how much you owe. Are Floridians paying more? Because that’s what we should care about.  According to Chip Kahn at the Federation of American Hospitals, if the authors had instead compared the actual payment-to-cost ratio of these hospitals to the national average, they would have discovered virtually no difference between the two groups – 1.3 for the 50 hospitals and 1.2 for the national average.

So what’s this all this about? Are these charges driving up overall healthcare costs as the study purports? Kahn at the Federation of American Hospitals: “We have experienced a historic slowdown in spending growth over the last five years, while hospital price growth remains at record lows – 0.3 percent in April compared to the prior year.”

Nope, it’s not that either.

It’s worth asking; Who’s behind these manufactured claims, what’s their motive and what do they have to gain?

I have a hunch, but I’ll leave that for another day.

*(Health Affairs Blog“No Method To The Madness: The Divergence Between Hospital Billed Charges And Payments, And What To Do About It,” Posted By Maribeth Shannon and Jen Joynt, 10/7/13)

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.