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Hospitals receive widely different payments for same procedure, state data shows

A state dashboard could help Oregon patients and businesses shop around. It also raises questions about hospital billing.
August 28, 2023

How much private insurers pay for the same medical procedures varies significantly depending on the hospital they were performed in, a state dashboard shows. 

The Oregon Health Authority recently released an updated version of its dashboard that shows that insurers paid a wide range of amounts for the same procedures to different hospitals across the state. The dashboard, which covers 120 procedures, shows that even the same hospitals received varying amounts from insurers for performing the same medical operations. 

The dashboard is part of efforts at the state and national level to bring greater transparency to rising medical costs in hopes of giving consumers and businesses better deals. While the dashboard shines a brighter spotlight on medical prices, it still leaves some questions unanswered. 

“The disparity of prices between hospitals and inside hospitals highlights the importance of comparing prices,” Maribeth Guarino, health care advocate for the Oregon State Public Interest Research Group, told The Lund Report. 

She said that consumers could use the dashboard to consider which health policies to buy based on prices at hospitals. Consumers could also use the dashboard to plan which hospitals to have certain procedures at, such as a couple planning on having a child, she said.

The dashboard shows that Asante Rogue Valley Medical Center received the highest median payment of $14,887 for the 168 deliveries without complications it performed in 2021. St Alphonsus Medical Center in Baker City, which is on track to close, received the lowest median payment of $5,953 for its 11 deliveries. 

Statewide, hospitals received a median payment of $9,642 for the 5,688 deliveries without complications they performed in 2021. 

Similarly, the dashboard shows that Adventist Tillamook Regional Medical Center received the highest payments for knee replacements of any hospital in Oregon. The hospital performed 10 knee replacements in 2021, receiving a median payment of $41,846, according to the dashboard. 

Kaiser Westside Medical Center in Hillsboro charged insurers the least. The hospital received a median payment of $15,919 for the 193 knee replacements it completed. Statewide, hospitals performed 959 knee replacements for a median payment of $27,434. 

Guarino said that some level of price variation is to be expected across hospitals. But she said that the vastly different price ranges for the same procedures raises questions about how the cost of medical care is determined. 

“There is definitely something happening behind the scenes,” she said. 

George Nation, a professor of law and business at Lehigh University in Pennsylvania who studies hospital pricing, told The Lund Report that the dashboard is a useful tool but he would like to see it do more. 

Nation said he was disappointed the Oregon dashboard  doesn’t include what hospitals are paid by Medicare, the federal government’s health insurance program for seniors. Medicare payments are structured so that hospitals can cover their costs and make a modest profit. Nation said that makes Medicare payments a useful benchmark for evaluating hospital prices. 

Nation said he’d like to see the dashboard include how much specific insurers paid for procedures in order to help companies shop for health plans. He said it would also be enhanced by including how much patients pay out of pocket. 

“In order to be useful to patients and to drive competition to bring down health care prices, patients need to see at a glance how much out of pocket they will pay at each specific hospital for the procedure they need,” he said. “This tool is not quite to that point yet.”

In addition to differences in hospital payments, the dashboard also shows that payments for medical procedures continue to rise. The average inflation-adjusted payment for an inpatient procedure in 2019 was $30,937, according to the dashboard. That rose to $37,151 in 2021. 

You can reach Jake Thomas at [email protected] or via Twitter @jakethomas2009.