Swedish Disseminates Information Intended to Educate, Clarify Medicare Charge Data, Related Questions

June 24, 2013

By Swedish News

SEATTLE, June 24, 2013 - As part of the Obama administration’s work to make the United States health-care system more affordable and accountable, the Centers for Medicare & Medicaid Services (CMS) released 2011 data in early May that shows significant variation across the country and within communities in what providers charge for common services. These data include information comparing the charges for the 100 most common inpatient services and 30 common outpatient services. Providers determine what they will charge for items and services provided to patients and these charges are the average amount the providers bill for an item or service. The following information is intended to help patients and family members better understand this complicated topic.

Important Points

Swedish encourages our patients to look into the cost of their care and to become more informed advocates of their health care.

  • We recognize that hospital charges are very complicated and not easy to understand, especially for patients and their families when dealing with a medical condition or illness.
  • We are dedicated to making more information available and helping our patients better understand it. As a member of the Washington State Hospital Association, Swedish has voluntarily made pricing and quality information available to consumers for years.

Many factors go into determining hospital charges.

  • Charges have been historically based on all of the factors that attribute to cost – from every itemized supply to procedures.
  • Each patient has different needs and the cost of care can vary greatly from patient to patient.
  • More sophisticated facilities, technologies and specially trained providers like those found at all Swedish campuses, helps us deliver the high-quality care that Swedish is known for, but also contributes to the cost of care.

Hospital charges are not reflective of final costs to the patient.

  • Pricing data currently reported by CMS reflects average inpatient charges from 2011. These averages are not reflective of the actual price of a procedure or service.
  • Pricing information does not reflect what a patient will ultimately pay; for most people, rates are negotiated by their insurance companies.

We recognize that pricing in the health-care industry needs improvement and we are committed to working with both government and private insurers to improve the cost of care as well as pricing information patients access.

  • Swedish is continually working to reduce what it costs to deliver care for our patients, while ensuring the safety and quality of our care at all times to all patients.

As a non-profit, community-based health system, Swedish provided more than $130 million (actual cost) of community benefits (including charity care and bad debt) in 2012.

Frequently Asked Questions

Q: Why does Swedish appear to be more expensive than the other hospitals in the region?

A: Pricing data reported by CMS reflects average inpatient charges. These averages are not reflective of the actual price of a procedure or service. Instead, the average calculated takes into account the amount of care and type of specific services provided to our patients undergoing a specific procedure and/or inpatient stay. That means when we care for sicker patients and/or treat more complex cases, our average Medicare charges increase.

Bottom line, every patient is unique and requires an appropriate level of personalized care. Our primary goal is to deliver the safest, highest-quality care to all our patients, no matter their ability to pay.

Q: How do hospitals determine these charges?

A: Hospital care is personalized for each individual patient and their unique needs. Many factors go into determining pricing – from every itemized supply to procedures that require specialized clinical expertise, which can include highly-specialized physicians and providers, as well as leading-edge technology.

Q: What is the difference between charges and costs?

A: Charges reflect the sum total of all services that a patient receives. The costs are what the payor and/or individual pay for those services. Costs are ultimately determined through a variety of factors including the type of insurance(s) and/or benefits that a patient has.

The same goes for the provider. Hospitals, like Swedish, are reimbursed based on a variety of factors negotiated with the payor(s).

Q: How can general consumers use the CMS charge data to determine their health-care costs?

A: We encourage our patients to look into the cost of their care. Reviewing average CMS charge data, while important, is not always the best approach. We recommend that patients contact their insurance provider and/or the hospital-billing department directly to discuss actual or estimated costs of care.

Q: How does Swedish factor in Charity Care when determining costs?

A: Swedish continues to be a leading community health partner, ensuring that all who seek care receive the highest-quality medical attention, regardless of their ability to pay. As a nonprofit organization, we have and will continue to care for the uninsured and underinsured. Swedish has a number of ways that it covers the cost of this care – from philanthropic community support to donations of time and expertise from volunteer physicians, etc..

Q: Why do charges vary from one location to the next?

A: The variety and scope of services, medical technologies and staff expertise, along with other similar attributes impact the facility costs for a particular hospital. These are unique to each individual hospital and are factored into a patient’s total cost of care.

Q: What is Swedish doing to drive down costs in the coming year(s)?

A: Swedish actively looks at its costs and billing structures, on an ongoing basis, to find new and better ways to minimize the cost of care for our patients. We have also worked with our affiliate, Providence Health & Services, to streamline administrative functions and create efficiencies across the system to reduce the total cost of care.

Ultimately, we believe the most effective way to help improve people’s health and drive down costs is by increasing access to appropriate care and health education. A big part of this is preventative care and wellness so we can help our patients manage disease(s) and chronic conditions. Preventative care and our commitment to ensuring societal access to health care has, and will continue to be, a top priority for Swedish.

Q: How did this problem come about in the first place?

A: What hospitals charge and what they are paid has become disconnected over time. Hospitals, like Swedish, have been faced with lower reimbursement rates – from both government and commercial insurers – while also covering the cost of care for the many uninsured and underinsured in the communities we serve. This has played a large part in the increase of health-care costs over time.

Swedish recognizes that rising health-care costs continue to be a problem; we are committed to being a part of the long-term solution. As a nonprofit organization and community resource that has served the Puget Sound region for 103 years, it is Swedish’s mission to improve the health and well-being of each person we serve.

Q: Do you think health-care reform will help correct this problem?

A: It is hard to say what the future will bring. However, we believe that increased focus on preventative care and helping provide health-care access to all citizens will positively impact our community in the long run.