Call it the sticker price.
Anyone who ever bought a new car knows what that is — the starting point for negotiations. Any resemblance to the actual price is coincidental. In real estate, they call it the listing price. It's negotiable, too.
Who knew that the principles for buying an Acura or an A-frame applied to an appendectomy?
OK, it isn't a complete surprise to students of health care economics, and it isn't a perfect analogy, either. Still, a new federal database reveals what hospitals typically bill for common procedures much as a window sticker itemizes the asking price for a new Cadillac.
But be warned: If you look, you're liable to experience sticker shock.
The database, compiled from Medicare billing records for the 100 most common diagnoses and treatments, shows that prices charged by hospitals are not only sky high, they vary so widely that it's hard to fathom any relationship to the actual cost of providing care.
In the North Bay, Kaiser Permanente Medical Center in Santa Rosa bills an average of $44,278 for a major joint replacement. Expect a bill for $136,762 from Memorial Hospital for the same procedure. To treat a respiratory infection, the average bill ranges from $22,972 at Ukiah Valley Medical Center to $126,146 at Marin General Hospital in Greenbrae.
In its own examination of the vast disparity in hospital charges across the country, Time magazine cited examples including a $1.50 charge for a single 325 mg dose of acetaminophen (Tylenol). The retail price: $1.49 for 100 pills.
Bear in mind: These are just the hospital's charges. Doctors' fees usually are billed separately.
Most people don't pay sticker price for a new car, and most people won't pay these prices for hospital treatment, either. Insurers negotiate discounts for policyholders (though they often cite rising hospital costs as a justification for increasing premiums), and reimbursement rates set by Medicare are considerably below hospital "chargemaster" rates.
Indeed, officials at Memorial Hospital urged us to focus on what it gets paid by Medicare as opposed to what gets billed for medical services.
However, to do that would overlook one of the most pernicious aspects of the wink-and-a-nod system for billing. There's nothing fictional about these invoices when the recipients are the people least able to afford the fees — the uninsured and underinsured, a group composed mostly of working people whose employers don't provide health insurance, who make too much money to qualify for Medicaid and who can't afford comprehensive coverage.
"They are powerless buyers in a seller's market where the only sure thing is the profit of the sellers," journalist Steven Brill wrote in "Bitter Pill," his 24,000-word account of the state of the U.S. health care system for Time magazine.
With the Affordable Care Act going into full effect next year, fewer people will be uninsured, but some patients still will be asked to pay heart-stopping bills for health care.
The federal Medicare database may help people shop for better prices, but its real value is highlighting the next step for reformers: containing costs.