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The Cost of a 3-Day Hospital Stay   (a reader, January 7, 2008)

Some holidays are better than others. This last Thanksgiving, I spent the holiday in the hospital. Medicare recently sent me the summary of the bills, and I thought you would be interested.

I had gone to the Emergency Room about my left leg, which was swollen below the knee, red, and very warm to the touch. It was 4:00 am, and I thought I would just get a quick reassurance that it was nothing serious, and then go home and go back to bed. It didn’t work out that way. I was told that the most likely diagnosis was Deep Vein Thrombosis, the famous complication of tight airline seating. In other words, a blood clot in my leg.

Of course, they couldn’t verify this without a test. The simplest would be an ultrasound, but that couldn’t be done until the next shift started at 9:00 am. After hours of staring at the walls in the ER, they finally did the test. It did show a blockage, and so they admitted me to the hospital. I was given two shots a day of blood thinner, a couple of pills, and no other treatment. I had a private room and the usual hospital meals. Nurses did blood pressure monitoring every few hours, and one blood test was done each day to see how the blood thinners were doing. After three days of this, they repeated the ultrasound, found the clot gone, and I was released.

Guess how much all of this cost? Here are the items on Medicare bill. This does not include the three separate doctors who saw me, both in the hospital, and in the ER.

Claim Line Number: 1 Revenue Code: 0120 - General Classification ROOM-BOARD/SEMI Amount Charged: $7,374.00 Total Units: 3 This is the bill for the room, $2458 a day. I assume this has no relation to the actual cost. I’ve read that the hospital cost is comparable to a cheap hotel room (which it resembled), plus the cost of nursing. If a nurse cost $90K a year, and it takes 3 nurses to cover a 24 period, and each nurse handles 5 patients, you’d get a daily cost of 90 * 3 / 5 / 365 or $148 a day. Even adding a few extra costs, or having a lower number of patients covered, I’d think $500 a day would do nicely for room and nursing. Claim Line Number: 2 Revenue Code: 0250 - General Classification PHARMACY Amount Charged: $3,314.50 Total Units: 20 This one is a bit of a mystery. As I mentioned, I got 2 shots and 2 pills, for 3 days. This is a total of 12 items, not 20. I’m not sure how much the shots are, but the pills are cheap. Amazing they could run up this high a charge. Claim Line Number: 3 Revenue Code: 0259 - Other DRUGS/OTHER Amount Charged: $178.10 Total Units: 5 Another mystery. Claim Line Number: 4 Revenue Code: 0270 - General Classification MED-SUR SUPPLIES Amount Charged: $210.00 Total Units: 5 Syringes? Who knows. Expensive, whatever they were. I was getting ice cream out of their fridge all night. Perhaps that’s it… :-) Claim Line Number: 5 Revenue Code: 0300 - General Classification LABORATORY or (LAB) Amount Charged: $288.00 Total Units: 4 If this is the charge for 4 blood tests to determine how well the thinner was working, it’s actually semi-reasonable. Claim Line Number: 6 Revenue Code: 0301 - Chemistry LAB/CHEMISTRY Amount Charged: $972.04 Total Units: 3 But wait! If the lab work above was for blood tests, what’s this? Add this to the previous item and suddenly the cost doesn’t look very reasonable. Claim Line Number: 7 Revenue Code: 0302 - Immunology LAB/IMMUNOLOGY Amount Charged: $180.15 Total Units: 2 Another mystery. Did they take my blood 4 times (claim 5), test it three times one way (claim 6) and two times another way? Do they make this stuff up? Claim Line Number: 8 Revenue Code: 0305 - Hematology LAB/HEMATOLOGY Amount Charged: $1,666.58 Total Units: 13 Something was done 13 times. Perhaps they charge each time they take your temp and blood pressure? This is about right for the number of times they woke me up in the middle of the night. Claim Line Number: 9 Revenue Code: 0450 - General Classification EMERG ROOM Amount Charged: $2,241.00 Total Units: 2 As I mentioned, I started in the emergency room. I sat around for 6 hours, had one ultrasound done. Saw one doctor. Not sure how they get 2 units out of that, or where the charge comes from. I’ve noticed on previous bills that any visit to the ER, even to ask them about a test done to me, is $440. Claim Line Number: 10 Revenue Code: 0921 - Peripheral Vascular Lab PERI VASCUL LAB Amount Charged: $3,644.00 Total Units: 2 Here we have the ultrasound, which was done twice. $1822 per shot seems steep, since the procedure takes 20 minutes and is done by an ultrasound technician, not a doctor. The machines are basically PCs with some special software. I’m sure they get $50,000 or something for them, but amortized over the thousands of ultrasounds the machine is used for, it can’t be significant. This just strikes me as more padding on the bill. Claim Line Number: 11 Revenue Code: 0001 - Total Charges Amount Charged: $20,068.37 And so the grand total for 3 days of monitoring in the hospital, two ultrasounds and 12 meds is only $20,000.

We all know that many patients in the ER never pay (I think the percentage is about 50%.) I assume many inpatients never pay as well. The costs for this are added to the bills of paying patients, including Medicare patients. Fine. Someone has to pay.

The thing I wonder is if hospitals even really know their own costs. You may scoff at the idea that they don’t, but think about it. If there were some secret internal accounting system that had the true cost, with another huge line item saying “charity care”, no insurance company or Medicare would pay that inflated cost. They’d want to pay the real cost as shown on that other set of books. This would bankrupt the hospital.

Since this real number is so dangerous to have around, I wonder if the hospital even keeps it. I expect they push as much cost as possible into an “overhead” category, then distribute this as widely as possible over all their charges. The problem with this of course is that not knowing their own costs in detail makes it very hard for them to be cost efficient. It also removes a lot of the motivation to work on improvements, if none of it helps the bottom line of the hospital. Staff will resist any nickel and diming of their day to day activity, so perhaps they just shrug and overbill their paying customers and leave it at that.

I can't wait to see what happens to this system when the boomers all start to pile onto it in four years or so!

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