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    When you shop for groceries or clothes, you can choose what you buy based on price.

    But when it comes to health care — arguably one of the most important services that impact our quality of life — no such luxury exists. There are no clear prices and little choice, especially if you are restricted to a certain doctor or hospital by your insurance plan.

    Earlier this month, the federal government released a massive database of prices hospitals charge Medicare, aimed at increasing transparency and accountability in the powerful health care industry. The information, released for the first time ever, put a spotlight on the exorbitant price of health care, and the wide variation in what consumers can expect to pay when they get sick or injured, including in San Diego.

    For example, a new pacemaker at San Diego’s Scripps Mercy Hospital will cost you $86,000, but it will set you back $139,000 at Sharp Chula Vista. If you get pneumonia or pleurisy, a type of chest infection, you can expect to pay $27,000 at Scripps Green Hospital in La Jolla, but $41,623 at Scripps Memorial Hospital in La Jolla, even though they’re part of the same nonprofit system. The price tag for a complex procedure like a drug-coated stent insertion, used to prevent clogged coronary arteries, varies at San Diego hospitals from $50,000 at UC San Diego Medical Center to $120,000 at Sharp Chula Vista


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    Why such disparity? No one seems to know.

    San Diego Hospital Bills

    “It doesn’t make sense,” said Jonathan Blum, director of the government’s Center for Medicare, when asked about the wild fluctuations in hospital prices.

    Unlike electricity, health care costs are not regulated, meaning that in our free market economy, hospitals can charge whatever price they want.

    A New York Times analysis of the recently released data found that Sharp Chula Vista on average charged more than double the national average, while UC San Diego Medical Center charged some of the lowest prices in San Diego, despite being a teaching hospital and treating a high number of uninsured patients. Kaiser Foundation Hospital in San Diego was also found to have the lowest prices in the surrounding area, according to the analysis.

    It’s common for hospitals that treat a higher number of the uninsured to have higher prices, said Tom Gehring, executive director and CEO of the San Diego County Medical Society.

    “If you’re close to the border, you may see more patients without any insurance and if you’re a hospital that’s required to take the uninsured, your total costs may be higher,” Gehring said. “So you may end up passing the costs onto the insured.”

    Patients often wonder how the prices are determined. But it turns out there is almost no correlation between what a hospital charges and what something actually costs, said Dr. David Chang, director of outcomes research at the Department of Surgery at the UC San Diego School of Medicine.

    “One of the reasons hospitals have these unrealistic prices is they know people aren’t going to pay. They’re trying to catch the few that can, but they also end up catching the poor,” he said.

    Chang is referring to the “working poor,” those who make too much to qualify for Medi-Cal, a state program that provides health insurance for low-income residents, are not old enough to get Medicare (which offers coverage for those 65 and older) and don’t have health coverage through work. They’re typically the ones who get stuck with the largest bills.

    An estimated 500,000 San Diego County residents lack insurance, according to a 2011 analysis of U.S. Census data by the left-leaning Center on Policy Initiatives. Others have PPO plans that require the patient to pay a percentage of the total bill.

    Even those with employer-provided health plans who think they are completely covered are often shocked to find out they have a cap on how much their insurance pays when they land in the hospital or are transported by ambulance.

    Medical expenses are the leading cause of bankruptcy in the United States, making up more than 60 percent of cases, according to a 2009 study by the American Journal of Medicine. When they don’t go bankrupt, American families are watching their life savings disappear following an accident, a stay at the hospital or a life-threatening illness.

    That’s what happened to former San Diego resident Kristen Burris, who was forced to use most of her savings following two cesarean sections, one emergency and one scheduled, at Scripps Memorial Hospital in La Jolla.

    Burris and her husband have their own acupuncture practice and were spending $1,100 a month on insurance for the family. But because the plan had a $7,500 yearly limit, the Burrises quickly maxed out the plan and racked up $30,000 in bills.

    “The bills were astronomical
 and they came at different times,” said Burris. “I would painstakingly call the insurance company and get a different
 answer every time. But mostly, they would simply say that was not part of
 my deductible. It was ridiculous.”

    Burris also found charges for services she says were not performed, including resuscitation and the use of compression boots, often used to help blood circulate. She was eventually able to get the hospital to lower the bill by $8,000, but the experience left the family financially and emotionally drained, so much so that they decided to relocate to Idaho, where health care costs are significantly lower, according to data.

    Today, Burris said her family pays around $480 a month for medical coverage for their family of four.

    Scripps did not respond to a query about Burris’ claim that she was charged for services not performed, but spokesman Keith Darce said each patient’s bill is driven by the unique care they receive.

    “No two cases are exactly the same in terms of medications, complications, amount and level of care required and countless other variables,” Darce said in an email.

    He said the hospital works with uninsured patients to help determine whether they qualify for Medi-Cal, Medicare or other government assistance and offers financial aid and discounts of at least 20 percent to all uninsured patients.

    “Many of them receive discounts far beyond 20 percent, and some end up paying nothing,” he said. Scripps spent about $41 million in 2012 on what it calls “charity care,” according to its community benefit report.

    Scripps Health pulled in $278 million in profit in 2010, according to the most recent publicly available tax returns. Scripps President and CEO Christopher Van Gorder received close to $1.5 million in salary and benefits; Vice President Richard Rothberger took home about $1 million that year.

    The hospital also spent about $500,000 on lobbying efforts, according to those tax returns.

    That’s similar to many other San Diego hospitals, including Sharp HealthCare, which paid President and CEO Michael Murphy about $1.3 million in 2010. (It also paid a senior vice president about $626,000 that year.)

    Could this be one reason health care is so expensive?

    Perhaps. According to a special report in Time magazine in March, hospitals routinely mark up both medicine and procedures and perform more services than needed.

    That’s because under the current system, hospitals and doctors don’t have an incentive to save patients money by providing them the most efficient care at the lowest possible price, said Clay Johnston, a doctor who directs the University of California, San Francisco’s Center for Healthcare Value, which studies how to reduce the price of health care in the U.S.

    “We know there is waste in the way care is delivered, the extra lab that’s drawn, the extra X-ray, so we’re trying to come up with ways to reduce the costs,” Johnston said.

    Some hospitals have implemented Accountable Care Organizations, essentially groups of doctors, hospitals and other providers who come together voluntarily to give coordinated high-quality care to patients, according to the Centers for Medicare and Medicaid Services. The idea is to treat patients before their conditions escalate and avoid redundant services.

    “We as physicians need to explain to patients what the options are and care about the cost, and that hasn’t happened so far,” Johnston said. “Part of that is supported by a system in which patients have traditionally not paid, so physicians don’t feel like their decisions ought to be at all contingent on costs. But the reality is entirely different.”

    But Dan Gross, executive vice president of Sharp HealthCare, attributed the prices to a service that he said is world-class.

    “Health care in this country is extraordinary,” Gross said. “When you take a look at our ability to deal with very complex, high-acuity patients, utilizing some of the brightest medical professionals and the advanced technology utilized in our industry … all of that indeed costs money.”

    Unlike restaurants or other service-oriented businesses, Gross said, hospitals treat everyone, even those who can’t afford to pay.

    “Hospitals have a federal mandate to care for and treat for anyone regardless of their ability to pay,” Gross said. Sharp has a charity care program that offers substantial discounts to patients and last year provided $305.3 million in unreimbursed community benefits programs and services, he said. “So no matter who presents to a hospital, we are caring for and treating them.”

    The Affordable Care Act, which will be implemented starting next year, will help increase access and eliminate caps on coverage. But it does nothing to address the cost of health care and will actually increase how much we pay because of the influx of new patients, said San Diego County Medical Society’s Gehring.

    “The Affordable (Care) Act may make a significant dent in the number of people who go bankrupt due to health care costs, because they will no longer be forced to choose between food and medicine,” he said. “But it won’t drive the overall cost down and is not the final answer to our nation’s health care financing problems.”

    An the end of the day, disparity in hospital prices may matter much less than how people can afford the care they get in the first place, say health care reform advocates. In 2008, Americans spent $8,000 a year on health care compared with $3,000 to $4,000 a year in many Western European countries, according to data from the Organization for Economic Cooperation and Development.

    Chang of UCSD emphasized one silver lining to high hospital bills: They’re not set in stone.

    “Until we do fix the price side of things, patients at least need to know that hospitals are always willing to negotiate. The prices they set are just a starting point.”

    Correction: An earlier version of this story mischaracterized Scripps President Christopher Van Gorder’s annual salary. He was compensated $1.5 million in salary and benefits in 2010, and had a total accumulated retirement package worth about $1.2 million. See the 990 form here.

      This article relates to: Corrections, Health Care, News

      Written by Karina Ioffee

      Karina Ioffee is a reporter whose work has appeared in the Associated Press, Reuters, NY Daily News and Huffington Post. See more of her work at karinaioffee.com.You can contact her directly at karina.ioffee@gmail.com.

      20 comments
      Bill Bradshaw
      Bill Bradshaw

      On April 30, I had a hip replacement, with some complications, at Sharp Memorial. I’m looking at the so-called bill, which is a fantasy. The hospital charges for a three day stay, which do not include either the surgeon or the anesthesiologist, come to $174,690.90. After “adjustments”, Medicare paid $18,822.67 and the remainder of $1184.00 is mine. Quite a bargain (but the doctors haven’t been heard from yet). Ben Carson, the noted neurosurgeon from Johns Hopkins, has been making the rounds of talk shows lately, opining that the cost of health care will continue to grow exponentially until patients have a lot more skin in the game and there is actually a market for services, i.e., a way for the patient to shop around for a better price. Makes sense to me.

      Bill Bradshaw
      Bill Bradshaw subscribermember

      On April 30, I had a hip replacement, with some complications, at Sharp Memorial. I’m looking at the so-called bill, which is a fantasy. The hospital charges for a three day stay, which do not include either the surgeon or the anesthesiologist, come to $174,690.90. After “adjustments”, Medicare paid $18,822.67 and the remainder of $1184.00 is mine. Quite a bargain (but the doctors haven’t been heard from yet). Ben Carson, the noted neurosurgeon from Johns Hopkins, has been making the rounds of talk shows lately, opining that the cost of health care will continue to grow exponentially until patients have a lot more skin in the game and there is actually a market for services, i.e., a way for the patient to shop around for a better price. Makes sense to me.

      mlaiuppa
      mlaiuppa

      Now go find that New York Times article that compares prices in the U.S. to prices in other countries and ask, why does it cost four times more in this country for the same (or sometimes worse) care?

      mlaiuppa
      mlaiuppa subscriber

      Now go find that New York Times article that compares prices in the U.S. to prices in other countries and ask, why does it cost four times more in this country for the same (or sometimes worse) care?

      Don Wood
      Don Wood

      This is an excellent example of useful journalism. How about adding Kaiser Healthcare to the list of hospitals and printing this list of typical hospital procedures and prices every month, or at least every quarter. VOSD could help the local free market work by shedding more daylight on pricing practices. Over time, let's see if having their prices printed in VOSD will convince some local hospitals to bring their prices more in line with the market.

      Don Wood
      Don Wood subscriber

      This is an excellent example of useful journalism. How about adding Kaiser Healthcare to the list of hospitals and printing this list of typical hospital procedures and prices every month, or at least every quarter. VOSD could help the local free market work by shedding more daylight on pricing practices. Over time, let's see if having their prices printed in VOSD will convince some local hospitals to bring their prices more in line with the market.

      drbadams
      drbadams

      This story states that "The Affordable Care Act, which will be implemented starting next year, will help increase access and eliminate caps on coverage. But it does nothing to address the cost of health care..." This isn't accurate. There are plenty of provisions in the ACA that aim to reduce health care costs--see here for a list starting on page 8: http://kff.org/health-reform/fact-sheet/summary-of-new-health-reform-law/. It's unclear to what extent these provisions will actually reduce costs, and many of cost-cutting provisions are pilot programs that would need to ramped up to realize meaningful savings. But to say that the ACA "does nothing" to address costs is misleading--it certainly makes an effort.Summary of the Affordable Care Act - http://kff.orgSummary of the Affordable Care Act On March 23, 2010, President Obama signed comprehensive health reform, the Patient Protection and Affordable Care Act, into law. The following summary of the law, and changes made to the law by subsequent legislatio...

      bob dorn
      bob dorn

      I have nothing but respect for this article. Anyone who's ever had to open a surgery and/or hospitalization bill knows how impenetrable and byzantine the accounting gets. I don't fear the doctors: not at all. I fear the MBAs who've taken over the hospitals. The diligence and care that Ioffee gives this little investigation can be placed at the same level as Steven Brill's in TIME, to which she refers.

      bob dorn
      bob dorn subscriber

      I have nothing but respect for this article. Anyone who's ever had to open a surgery and/or hospitalization bill knows how impenetrable and byzantine the accounting gets. I don't fear the doctors: not at all. I fear the MBAs who've taken over the hospitals. The diligence and care that Ioffee gives this little investigation can be placed at the same level as Steven Brill's in TIME, to which she refers.

      Carrie Schneider
      Carrie Schneider

      Karina, this is a serious issue and I hope you stay on it. I can confirm that it's impossible (not just difficult, but impossible) to get information on prices before services are performed. I had a routine screening procedure at Scripps Green about a year ago. The pre-procedure information contained a disclaimer that the hospital couldn't guarentee that my insurance would cover it. Concerned, I called the hospital and Aetna several times to find out what I would be paying and it was impossible to get them to give me an answer. Also, I think there's an error in the story. "Burris and her husband have their own acupuncture practice and were spending $1,100 a month on insurance for the family. But because the plan had a $7,500 yearly limit..." Surely the situation is that their out-of-pocket-maximum was $7,500, no? Why would anyone pay more than $12K for a policy with a $7.5K cap? If the problem is the OOP maximum, moving to Idaho will not help.

      Karina Ioffee
      Karina Ioffee

      Hi Carrie. You're right. Burris's out of pocket maximum was $7,500. Poor word choice on my part.

      Jeff Toister
      Jeff Toister

      I echo Carrie Schneider's comment about the difficulty of finding pricing on healthcare services. My insurance policy has a high deductible which encourages me to compare prices. It's often very difficult to obtain this information. Many are surprised that I'm asking for it, leaving the impression that few patients request pricing information. Perhaps this is one reason why healthcare prices vary so widely?

      Carrie Schneider
      Carrie Schneider subscribermember

      Karina, this is a serious issue and I hope you stay on it. I can confirm that it's impossible (not just difficult, but impossible) to get information on prices before services are performed. I had a routine screening procedure at Scripps Green about a year ago. The pre-procedure information contained a disclaimer that the hospital couldn't guarentee that my insurance would cover it. Concerned, I called the hospital and Aetna several times to find out what I would be paying and it was impossible to get them to give me an answer. Also, I think there's an error in the story. "Burris and her husband have their own acupuncture practice and were spending $1,100 a month on insurance for the family. But because the plan had a $7,500 yearly limit..." Surely the situation is that their out-of-pocket-maximum was $7,500, no? Why would anyone pay more than $12K for a policy with a $7.5K cap? If the problem is the OOP maximum, moving to Idaho will not help.

      Jeff Toister
      Jeff Toister subscriber

      I echo Carrie Schneider's comment about the difficulty of finding pricing on healthcare services. My insurance policy has a high deductible which encourages me to compare prices. It's often very difficult to obtain this information. Many are surprised that I'm asking for it, leaving the impression that few patients request pricing information. Perhaps this is one reason why healthcare prices vary so widely?

      Michael Rohde
      Michael Rohde

      If you have read this and you are not outraged, you are a doctor or corporate executive in an HMO. This is why we spend twice what the rest of the world spends on health care, in black and white. Combined with our defense budget, the health care spending amounts to a trillion in unnecessary expenditures, much of it profits for the 1% that is taxed less than the wealthy of any country in the world except for Mexico and Chile. That's pretty exclusive company we're keeping, a national embarrassment. The republicans have done this by getting the parents of the baby boomers to vote against their own children, making them the first generation in American history to do worse than their parents. Concentrating the wealth like that has stunted the national economy, shrinking the GDP during the great recession, when we need expansion desperately. These billionaires have made Karl Marx look like a genius. They have purchased Congress with their Supreme Court decision giving corporations the rights of people, spending billions on lobbyists giving themselves billions in tax breaks while the middle class dies. Suffice it to say, this is not your father's democracy.

      Michael Rohde
      Michael Rohde subscriber

      If you have read this and you are not outraged, you are a doctor or corporate executive in an HMO. This is why we spend twice what the rest of the world spends on health care, in black and white. Combined with our defense budget, the health care spending amounts to a trillion in unnecessary expenditures, much of it profits for the 1% that is taxed less than the wealthy of any country in the world except for Mexico and Chile. That's pretty exclusive company we're keeping, a national embarrassment. The republicans have done this by getting the parents of the baby boomers to vote against their own children, making them the first generation in American history to do worse than their parents. Concentrating the wealth like that has stunted the national economy, shrinking the GDP during the great recession, when we need expansion desperately. These billionaires have made Karl Marx look like a genius. They have purchased Congress with their Supreme Court decision giving corporations the rights of people, spending billions on lobbyists giving themselves billions in tax breaks while the middle class dies. Suffice it to say, this is not your father's democracy.

      Don Wood
      Don Wood subscriber

      Next time you list procedures and prices, could you please include the prices of the local Kaiser hospitals? You noted they have the lowest prices in the area, but did not include them on your lists.

      Dagny Salas
      Dagny Salas memberadministrator

      Thanks for the feedback Don. If you use The New York Times interactive to search San Diego, then look up Kaiser, you can see a full list of what they charge: http://www.nytimes.com/interactive/2013/05/08/business/how-much-hospitals-charge.html?_r=1&How Much Hospitals Charge Medicare - http://www.nytimes.comData released by the federal government on Wednesday shows that hospitals across the country charge Medicare differing amounts for the same procedure. The data includes bills submitted in 2011 by 3,300 hospitals nationwide for the 100 most commonly p...

      Don Wood
      Don Wood

      Next time you list procedures and prices, could you please include the prices of the local Kaiser hospitals? You noted they have the lowest prices in the area, but did not include them on your lists.

      Dagny Salas
      Dagny Salas

      Thanks for the feedback Don. If you use The New York Times interactive to search San Diego, then look up Kaiser, you can see a full list of what they charge: http://www.nytimes.com/interactive/2013/05/08/business/how-much-hospitals-charge.html?_r=1&How Much Hospitals Charge Medicare - http://www.nytimes.comData released by the federal government on Wednesday shows that hospitals across the country charge Medicare differing amounts for the same procedure. The data includes bills submitted in 2011 by 3,300 hospitals nationwide for the 100 most commonly p...