Article: Health care charges in Ohio don't reflect actual costs or what insurance providers pay

"For years, Ohio has forced hospitals to report what they charge for heart surgery, knee replacements and other procedures, to help you price-shop when you have the need. But it's of little benefit to Ohioans because the numbers provided by hospitals have almost no relation to what insurance companies pay." (Source: "Hospital charges don't tell anything about price of surgeries," March 24, 2008.) However, Medicare, insurers and private businesses all pay far less than the published rate because they have negotiated steep discounts; this results in only uninsured patients paying the amounts reported by the state. For example, Cuyahoga County hospitals' average charge for performing a DRG 544 -- the code for common hip, knee or ankle replacement -- ranges from more than $23,000 to almost $47,000. But Medicare usually pays about $9,000 to $12,000 for a DRG 544.

J.B. Silvers, professor of health systems management at Case Western Reserve University Weatherhead School of Management, said "Charges are almost useless. They have almost nothing to do with costs. They are artificially high, and almost no one pays them. One study revealed that inpatient charges are marked up 156 percent over average costs. Everyone bargains for better prices except the uninsured, and they can't pay."

To learn what health insurers pay for procedures, patents can turn to data from the Centers for Medicare and Medicaid Services; the CMS data can be accessed through private websites like Vimo. In addition, subscribers to Anthem Blue Cross and Blue Shield in Dayton and Cincinnati can turn to an Internet sites where their members can find out the negotiated price for 38 common procedures, such as knee replacements and colonoscopies. Anthem plans to expand this service to Central Ohio by the end of April.