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Archive for Sunday, April 16, 1995

HOSPITALS LIKE APPLESORANGES?

April 16, 1995

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The bidders

Columbia/HCA Healthcare Corp. is one of three groups hoping to form a partnership with Lawrence Memorial Hospital. Here's how prices at Columbia's Overland Park Regional Medical Center compare with St. Francis Hospital and Medical Center in Topeka and Kansas University Medical Center, both members of one of the groups interested in LMH. St. Luke's Hospital of Kansas City, Mo., part of another group interested in teaming with LMH, refused to supply prices.

Procedure LMH OP KUMC St. Francis

Urgent emergency room visit* $132 $65 $437 $86

More urgent emergency room visit* $235 $159 $1,042 $168-423

CBC w/differential $23 $40 $71 $44.25

Urinalysis routine, w/microscopy $17.60 $31.89 $44 $48.50

Tetanus & diphtheria shot, adult strength $12.30 NA $4.88 $7.07

Splint arm plaster $25.80 $36.70** $90-142*** $54

Chest X-ray, 2 views $93 $131.32 $97 $100

  • -- Prices can vary depending on level of care.
  • * -- Short arm plaster
  • ** -- $142 is normal charge with radiology, IV, frequent vitals and medications. $92 for simple cases with little or no IV, vitals or medications.

NA -- not available

Hospital officials say it's not fair to compare prices. St. Luke's refuses to do so.

By Andrew E. Nachison

Journal-World Writer

If a Lawrence woman needs to deliver a baby by Caesarean section, a 40-minute drive on Kansas Highway 10 to Overland Park Regional Medical Center could cost her at least $1,200 more in hospital charges than the birth would cost at Lawrence Memorial Hospital.

Or, it could save her $1,000.

How much anyone will pay for hospital services depends to a large extent on their insurance coverage -- if they have any. It also depends on where the hospital is and what type of services it provides.

Urban hospitals with trauma centers are typically more expensive than suburban and rural hospitals, and hospitals anywhere with 24-hour emergency rooms are typically more expensive than outpatient clinics.

After Columbia/HCA Healthcare Corp. offered in February to buy half of LMH, executives with the for-profit Louisville, Ky., company agreed to a price comparison. Columbia has long boasted that economies of scale allow it to provide low-cost, high-quality care.

In March, two separate groups of hospitals also proposed partnerships with LMH, giving the LMH board three options for deals that could change the delivery of health care in Lawrence, plus a fourth option to remain independent.

One group included the Kansas University Medical Center in Kansas City, Kan., and St. Francis Hospital and Medical Center in Topeka. The other included St. Luke's Hospital in Kansas City, Mo.

The LMH board has not yet made a decision.

Prices submitted to the Journal-World suggest that Columbia's urgent-care clinic in Lawrence, Mt. Oread Medical Centre, are generally less than those at the LMH emergency room, while LMH is cheaper than Columbia's Overland Park Regional Medical Center.

A Mt. Oread visit for a simple laceration will cost $120, 37 percent less than the $190 charge at LMH. A sore throat exam will cost $61 at Mt. Oread, less than half of what it would cost at LMH, and a $55 ear infection exam at Mt. Oread will cost $153 at LMH.

Dennis Strathmann, chief financial officer at LMH, notes that Mt. Oread does not yet offer a full-service, 24-hour hospital emergency department, only a minor-emergency clinic comparable to a doctor's office or another private clinic in Lawrence, FirstMed, 2323 Ridge Ct.

"If we wanted to close our doors at 11 at night, our costs would be less, too," said Janice Early-Weas, an LMH spokesperson. "You're not comparing apples to apples. Every hospital is equipped and staffed differently. A community hospital is here to provide the best basic services that a majority of our community needs at a cost the community can afford.

"A facility in Kansas City that has open-heart surgery and higher levels of trauma care, it's going to cost more."

Columbia executives make the same point when prices at LMH are compared to those at Overland Park Regional Medical Center.

"In the case of Overland Park, you have a tertiary-care facility, a Level 2 trauma center. It has a heart program," said David Nevill, chief operating officer at Columbia's Mt. Oread facility in Lawrence. "It's not your basic community hospital, so we're not comparing like institutions with similar overhead structures."

Other Columbia executives have said that if the company can't invest in LMH it will build a new hospital in Lawrence, and if it does so, its hospital prices in Lawrence will have nothing to do with prices in Overland Park but will be competitive with LMH.

At the Overland Park hospital, a common blood test costs $40, compared to $23 at LMH. A chest X-ray that costs $93 at LMH costs 41 percent more -- $131.32 -- in Overland Park.

However, managed-care insurance has recently caught on in Kansas City, and Columbia officials say that results in lower charges for its patients.

Under managed care, hospitals and doctors bid on contracts to provide services to large groups of patients based on lump-sum annual payments for each patient.

For instance, a Caesarean section baby delivery at Overland Park Hospital cost $7,389.46, according to a December 1994 bill obtained by LMH. Columbia provided a copy of a C-section bill that charged $5,695 -- still 28 percent more than the $4,461 LMH calculated it would charge for a similar birth.

But Columbia also insists that the prices on its bills have little to do with what many patients actually pay, because so many of them are covered by managed-care contracts with lower rates. Columbia says the average managed-care price for an inpatient C-section delivery, based on its five largest managed-care contracts, is $3,445 -- 23 percent less than the LMH charge.

Despite claims of corporate buying power, medical supply charges at Overland Park appear no less than at LMH and in some cases are substantially more, according to patient bills supplied by LMH and Columbia.

  • A dressing used in a C-section delivery at Overland Park was billed at $10.20; at LMH it costs $3.10;
  • An external fetal monitor, which costs $166.30 at Overland Park, costs $136 at LMH.
  • Overland Park charged $18.90 for a glove that costs $5.10 at LMH.
  • The anesthesia base charge of $176.60 at Overland Park costs $72 at LMH.

The Journal-World also asked KUMC, St. Francis and St. Luke's to submit prices for comparison.

St. Luke's refused.

"In an era of increasing managed and contracted health care, pre-established charges are not an accurate reflection of consumer cost," Andrea Boepple, a St. Luke's spokesperson, said in a letter explaining the hospital's refusal to provide price information.

"It's very difficult, if not impossible, to draw conclusions about facility costs when you're comparing such a diverse group of health care organizations," Boepple said.

But in Lawrence, where the city-owned hospital is up for grabs by three groups that want to form joint ventures, price has long been a selling point for LMH.

"We do what we do, and we think we do a good job of it, and we think we meet the majority of the needs of the community," LMH's Early-Weas said. "We also know we have very excellent tertiary care a very short distance from this hospital, and that's a fortunate thing for this community as well."

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