New state report looks at varied hospital procedure prices

Reimbursement for the same procedures vary among hospitals operating in the same region and across the state, according to a new report announced Friday by the Oregon Health Authority.

The report details the median amounts paid by commercial insurers for the most common inpatient and outpatient procedures that were performed in Oregon hospitals in 2015.

The new 2015 report includes amounts patients paid for each procedure. (The 2014 edition only included amounts paid by insurers. Including patient contributions is more transparent and represents a complete picture of amounts paid.)

The report, “Oregon Hospital Payment Report 2015,” ( http://www.oregon.gov/oha/HPA/ANALYTICS/Pages/Hospital-Reporting.aspx ) is mandated by ORS 442.466. The annual report draws on data collected in the All Payer All Claims (APAC) database. The goal is to provide a source of transparency to the public on hospital reimbursement. Inpatient care accounts for as much as 30 percent of health care spending in the state.

“This report is another step forward in our state’s commitment to health care transparency and a look at the important services and procedures that hospitals across Oregon provide,” said Lynne Saxton, director of the Oregon Health Authority.

Highlights of the report include:

–Most procedures show sizable variations in paid amounts, both within and between hospitals.
–Among common outpatient procedures, heart electrophysiology studies were reported to have the highest median paid amount at $36,900.
–Among common inpatient procedures, heart valve replacement surgeries were reported to have the highest median paid amount at $84,700.
–Among common diagnostic and imaging services, nuclear medicine evaluations of the cardiovascular system were reported to have the highest median paid amount at $2,200.
–The procedure with the largest increase in median paid amount from 2014 was coronary bypass surgeries, increasing by $8,700.
–The procedure with the largest percent increase in median paid amount from 2014 was guidance procedures for radiation therapy, increasing 80 percent.

This is the second year OHA has released this report and this year’s report includes important updates and improvements.

Reimbursement for a procedure in a hospital depends on a number of factors. These factors should be taken into account when comparing charges between facilities. Here are some reasons that account for variations:

–Rate negotiation: Each hospital negotiates with each insurance provider they accept for the reimbursement rate for a procedure. This paid amount will vary depending on the hospital and the insurance company.
–Case complexity: An insurance company may reimburse a hospital within a range of amounts for a given procedure up to a predetermined maximum. This range is influenced by how sick the patient is, and how many extra services were required in order to perform the procedure.
–Geographic factors: A hospital’s location influences paid amounts. Communities with higher costs of living have higher salary, lease, and utilities costs. These differences in hospital operating expenses should be considered when comparing paid amounts.
–Economies of scale: Hospital volume influences the paid amount. Hospitals that perform the procedure hundreds of times will often accept a lower paid amount for each case because they make the difference up in larger volumes.