Hospital costs are soaring across the Washington area as the cost of buying the newest technologies jumps and more uninsured patients take their toll.
Four hospitals in Northern Virginia charged patients an average of 11 percent more for three dozen services between 2008 and 2010, according to The Washington Examiner’s review of the most recent data from Virginia Health Information, a nonpartisan nonprofit that studies health care. Hospitals studied include Inova Fairfax Hospital, Reston Hospital Center, Prince William Hospital Center and Inova Loudoun Hospital.
For example, patients at Inova Fairfax paid an average $21,333 for gynecological surgery in 2010, up 31 percent from 2008. The average cost of open heart surgery rose by $6,800 in the same period, to roughly $94,928.
| What hospital services cost | |||
| Montgomery General Hospital* | |||
| Hospital service | Fiscal 2010 rate | Fiscal 2012 rate | |
| Admissions services | $132/day | $194/day | |
| Newborn nursery | $601/day | $694/day | |
| Operating room | $23/minute | $26/minute | |
| Shady Grove Adventist Hospital* | |||
| Hospital service | Fiscal 2010 rate | Fiscal 2012 rate | |
| Admissions services | $86/day | $112/day | |
| Newborn nursery | $234/day | $260/day | |
| Operating room | $23/minute | $28/minute | |
| Inova Fairfax Hospital** | |||
| Hospital Service | 2008 patient’s average total charge incurred/average stay in days | 2010 patient’s average total charge incurred/average stay in days | |
| Cardiology, open heart surgery | $88,160/8.1 | $94,928/7.7 | |
| General surgery | $45,313/8.4 | $49,477/7.8 | |
| Obstetrics/delivery | $8,837/2.6 | $9,461/2.6 | |
| Reston Hospital Center** | |||
| Hospital Service | 2008 patient’s average total charge incurred/average stay in days | 2010 patient’s average total charge incurred/average stay in days | |
| Cardiology, invasive | $56,824/4.7 | $57,795/4.5 | |
| General surgery | $46,709/6.4 | $48,212/5.3 | |
| Obstetrics/delivery | $8,849/2.9 | $9,488/2.7 | |
| *Information from the Maryland Health Services Cost Review Commission | |||
| **Information from Virginia Health Information, most recent data available | |||
Inova spokesman Tony Raker said the cost increases are the result of pricey research and technology improvements, as well as increases in charity care for the uninsured.
Hospital services tend to be more expensive in Virginia than in Maryland, which is the only state in the country to set rates itself. The average cost for a hospital admission in Maryland grew by just 5 percent, or $540, to $11,000 between fiscal years 2008 and 2010, according to the state-appointed Maryland Health Services Cost Review Commission, which regulates hospital rates.
Although average overall costs rose only slightly, charges for some services jumped dramatically.
For example, charges for hospital admission services jumped 47 percent to $194 at Montgomery General and grew 20 percent to $347 at Prince George’s Hospital Center between fiscal years 2010 and 2012, according to data from the state rate-setting commission. Among the cost increases at MedStar Montgomery Medical Center, formerly Montgomery General, was a $93-per-day increase in newborn nursery care to $694 daily and a $124 increase in renal dialysis treatments to $742.
Driving the ballooning costs are ever-improving — and costly — medical technologies and a growing population of uninsured patients.
“Changes in technology is the biggest driver of costs in general,” said Karoline Mortenson, an assistant professor of Health Services Administration at the University of Maryland. “These hospitals are in a technological arms race to get more expensive technology, which will then attract better physicians.”
Uninsured patients cost Maryland hospitals nearly $926 million in fiscal 2010, up from $738 million in 2005, according to data from the Health Services Cost Review Commission.
Virginia does not keep records on uninsured patients, but economists say it’s a known driver of hospital cost increases in the Old Dominion.
“There is no such thing as free care,” said Rachel Garfield, a senior researcher and associate director of the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. “When the uninsured use hospital services, if they are unable to pay, the hospital has to find another source of payment.”
Maryland is trying to mitigate the impact of its uninsured population by expanding its Medicaid coverage, which is paid for by state and federal subsidies, to patients who would otherwise be uninsured. Gov. Martin O’Malley says under his administration, the state has expanded health coverage to 310,000 state residents.
But government-subsidized health care reimburses hospitals less than the privately insured, which is squeezing hospital revenue as more people qualify for Medicaid and Medicare as a result of the recession and aging baby boomers.
Some hospitals are compensating for the revenue losses by raising rates on the privately insured.
“In the absence of rate setting, non-Maryland hospitals must artificially mark up their charges by almost 200 percent in order to cover shortfalls due to uncompensated care, discounts to large HMOs, and low payments from Medicare and Medicaid,” according to a report from the rate-setting commission.
