Pharmacists shrug as hospital charges are posted

April 18, 2005

A growing move by states and health plans nationwide to post hospital charges for public scrutiny is eliciting yawns from pharmacists. "We don't expect any impact on pharmacy," said Pharmacy Society of Wisconsin spokesman Tom Engels. State law requires disclosure of hospital charges through a program called Wisconsin Pricepoint, run by the Wisconsin Hospital Association.

A growing move by states and health plans nationwide to post hospital charges for public scrutiny is eliciting yawns from pharmacists. "We don't expect any impact on pharmacy," said Pharmacy Society of Wisconsin spokesman Tom Engels. State law requires disclosure of hospital charges through a program called Wisconsin Pricepoint, run by the Wisconsin Hospital Association.

Pricepoint shows usual and customary charges, Engels explained. Charges for procedures can be found at http://www.wipricepoint.org/. Consumers provide the procedure and the hospital, and the Web site returns the number of discharges for that procedure, the average length of stay, average charge, average charge per day, and median charge per day. Numbers are shown for the selected institution, all hospitals in the county, all hospitals with similar patient volume, and all Wisconsin hospitals. Drugs, devices, supplies, operating room charges, physician or nursing fees, and other components are combined into a single charge estimate. "This is not what insurers pay, nor what patients pay, so it's not a genuine comparison," Engels said. Wisconsin also keeps drug prices under wraps.

Beyond Wisconsin, Humana and other third-party payers are posting actual out-of-pocket costs for procedures performed at different network hospitals. Humana has a Compare Hospitals Tool that encourages enrollees to compare prices and quality measures on its Web site.

Most Arizona hospitals have been reporting charges to the state for years, said Jerome Wohleb, president of the Arizona Society of Health-System Pharmacists. Charge data are compiled by the state and made available for public inspection.

The idea of comparative price information for hospitals grew out of the consumer movement. The consensus was that if consumers have access to pricing information for different hospitals, they would be able to make a more informed choice when they become patients.

"Behind this is the growing realization that hospital charges really do matter," explained Glen Melnick, professor of healthcare finance and director of the Center for Health Policy & Management at the University of Southern California. In California, a state law that went into effect in July 2004 requires most hospitals to make their chargemaster, their official price list, available for public inspection. Some institutions put the data on-line; some provide a paper copy for inspection.

Jay Rho, Pharm.D., president of the California Society of Health-System Pharmacists, agreed that opening chargemasters is not likely to have much effect. "It is deceptive to use chargemasters as an indicator of the actual cost to the consumer of the drug or procedure," Rho said.

Deceptive or not, chargemasters can cause consternation. That's because listed charges look like prices and they look absurd. According to one recent comparison, charges for common procedures can vary as much as 17-fold from one California hospital to another. A single 325-mg acetaminophen tablet, for example, is free at Sutter General Hospital in Sacramento, 12 cents at Cedars-Sinai Medical Center in Los Angeles, and $7.06 at Scripps Memorial Hospital La Jolla in San Diego. One tablet of Percocet (oxycodone and acetaminophen, Endo) ranges from $6.50 at Cedars-Sinai to $35.50 at Doctors Hospital in Modesto, near Sacramento.

For Melsen Kwong, Pharm.D., manager of pharmacy services at Cedars-Sinai, price disclosure is a double-edged sword. In many categories, Cedars is near the bottom of the charge chart. For other products, it is near the top. A head/brain CT scan without contrast that lists for $881.90 at Scripps is shown at $4,037.61 at Cedars and $6,599 at Doctors.