Friday, Sept. 10, 2004 | 11:11 a.m.
Las Vegas Valley hospitals billed patients and insurers as much as five times their actual costs, according to a national study released Wednesday.
As a state, Nevada ranked sixth in the nation for the markup charged for medical care at hospitals with the average markup 276 percent. The national average was 232 percent, according to the study of hospital costs and charges in the last two fiscal years.
The study, done by the nonprofit Institute for Health and Socio-Economic Policy for the California Nurses Association, showed that while none of Nevada's hospitals made the study's list of the 100 most expensive hospitals in the nation, many Las Vegas hospitals charged well over the national average.
North Vista Hospital, formerly Lake Mead Hospital, posted the highest markup in the state at 525 percent, meaning if a procedure cost $1,000 the hospital charged $5,250.
Nevada ranked No. 3 among the states for its operating room markups, which averaged 355.1 percent from fiscal year 2002 to fiscal year 2003. California and Florida ranked first and second respectively.
Nevada also ranked No. 3 for its pharmaceutical markups, which averaged 558.9 percent, while it ranked No. 15 for its medical supply charge-to-cost ratio of 457.3 percent.
Officials at Las Vegas hospitals say the study of 4,184 hospitals' charges is misrepresentative and "sensationalist" because the charge rate does not guarantee that hospitals receive that rate. They also said the study does not account for hospitals' reinvestment in the community through new hospitals, renovations and technology upgrades.
From fiscal year 2001 to fiscal year 2002 when financially troubled Tenet Healthcare Corp. owned North Vista, it had a markup of 476 percent. The hospital is now owned by IASIS Healthcare.
"Those charges were set by the previous owner of the hospital, Tenet Healthcare," IASIS spokeswoman Tomi Galin said. "Since IASIS has taken ownership we have had the opportunity to evaluate charges and to make adjustments where appropriate."
For example, room rates have been reduced by 30 percent at North Vista, she said.
"The evaluation of hospital charges is an ongoing process and we will continue to look at that," Galin said. "Other reductions are possible."
Universal Health Services Inc.-owned Valley Hospital had the second-highest markup in Nevada. Its sister hospitals Summerlin and Desert Springs posted the third- and fourth-highest ratios at 439.4 percent and 437.3 percent respectively. From fiscal year 2001 to fiscal year 2002 Summerlin's markup was 364.7 percent, while Desert Springs' markup was 346.1 percent.
Mike Tymczyn, spokesman for Universal's local hospitals, said his company "stands behind its billing practices and stands behind its cost structure. We work within the very strict federal and state guidelines we are under."
Desert Springs and Valley hospitals "go back 30 years and that kind of longevity is not based on price gouging. It's based on providing quality, convenient, accessible and affordable care," Tymczyn said.
The study ignores many of the problems hospitals are facing such as rising personnel, medical malpractice premiums and utilities costs, he said.
"The study doesn't take into account reinvestment of these profits into new technology, new hospitals and upgrades and the national and the Las Vegas epidemic of uninsured and underinsured," Tymczyn said. "I truly believe that whenever a report comes out like that that boils down an entire industry to a sensationalized headline-grabber of a story based on a numeric ranking, it borders on irresponsibility."
HCA Inc.-owned MountainView Hospital posted the fifth-highest markup at 416.6 percent from fiscal year 2002 to fiscal year 2003, up from 342.9 percent in the year-ago period. Its sister hospital Sunrise posted the markup at 410.7 percent from fiscal year 2002 to fiscal year 2003, up from 389.2 percent in the year-ago period. HCA declined to comment on the study.
Both Universal and HCA were sued last month in Clark County District Court on allegations that they gouge the uninsured and use aggressive collection practices. The lawsuits are pending.
Catholic Healthcare West-owned St. Rose Dominican Hospitals-Siena Campus had the seventh-highest rank in Nevada at 378 percent, up from 320.9 percent in the year-ago period. Sister hospital St. Rose Dominican Hospitals-Rose de Lima Campus posted the eighth-highest rank at 328.3 percent from fiscal year 2002 to fiscal year 2003. Catholic Healthcare West could not be reached for comment.
Bill Welch, president and chief executive of the Nevada Hospital Association, said the study does not look at what hospitals actually collect from patients and insurers, which is not equal to the charges.
"Those charges mean little to nothing," he said. "I don't know any hospitals in Southern Nevada that don't offer deep double-digit discounts, some exceeding 50 percent based on the volume they can bring to the provider."
The study said that hospitals may not receive the full charge from insured patients, but they often do from uninsured patients.
In Nevada, hospitals are required by state law to offer a 30 percent discount to uninsured patients and many of them are unable to pay that amount, Welch said.
Another thing that the study does not spell out is that hospital costs are higher in Nevada, Welch said.
"Our costs are greater because we don't have the same power of purchasing they have in other states," he said. "We have a population of 2 million, but we expect every modern service and drug to be available when we need it. Our costs for that are going to be greater."
He said the study also did not separate the inpatient and outpatient procedures, which can make a big difference because emergency room, outpatient costs are much greater.
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