EOScu | Key Terms Pillar Page

Acute vs. Long-Term

Acute care hospitals provide short-term care for illness, disease, injury, or surgery. In contrast, long-term care is typically for chronic illness, rehabilitation, or psychiatric care. Most hospitals by far are acute-care facilities (88%).

For-Profit vs. Not-for-Profit

A growing number of hospitals are investor-owned, with excess profits going to shareholders. However, the majority (76%) of community hospitals are still not-for-profit (local government or private organization operated), with excess funds remaining in the hospital. Both types of hospitals are evaluated and rated with the same metrics, and most studies show that the quality of care varies just as much, regardless of category. That is to say, there are high-scoring and low-scoring for-profit hospitals just as there are high-scoring and low-scoring not-for-profit hospitals. Some for-profit hospitals are focused on efficiency in order to lower costs, while others focus on certain procedures and services in order to provide investors with a return. Overall, no study has shown one or the other to provide a significantly better experience for patients.

Community vs. Non-Community

According to the American Hospital Association, a community hospital is any hospital that is not a federal hospital (such as a VA hospital). However, health associations and hospital rating organizations typically consider a community hospital to be also not a teaching hospital. Some even limit the definition to those hospitals that are independently run (not part of a system spanning a huge geographic area) and serving a local demographic. The basic definition, therefore, is a hospital that serves a local community, is run by local leaders, provides financial opportunities for the local economy. A community hospital can be either rural or urban, as described in the next section.

Urban vs. Rural

The geographic location of a hospital can greatly impact its size, services, demographics, employees, and many other factors. Urban hospitals, which make up the majority of community hospitals at 65%, serve a densely populated area, often with several competitors in the same area. They can vary in size, from under 100 beds to over 500. Rural hospitals, in contrast, are mostly small (100 or fewer beds), with small budgets and located outside a major metropolitan area. Rural hospitals tend to serve more Medicare and Medicaid patients, more uninsured patients, and are more likely to be designated a Critical Access Hospital by the Centers for Medicare and Medicaid Services (CMS). Critical Access Hospitals have fewer than 25 beds and are located at least 35 miles from another hospital, and make up about 75% of all rural hospitals. Both urban and rural hospitals can be designated Safety-Net Hospitals by CMS based on the proportion of charity care provided. These hospitals (for now) receive extra funds from CMS to help cover these costs.

Independent, System, and/or Network

Mergers and acquisitions in the healthcare industry are soaring. As a result, a growing number of hospitals are part of a system of multiple facilities administered from a central office. Systems can include one hospital and several separate specialized facilities, or several hospitals and their related satellite facilities. Separate from systems are healthcare networks, groups of healthcare facilities, physicians, insurers, agencies and others that work together to coordinate services. Members of a network are administered independently, but collaborate for each others' and the community's benefit. Independent hospitals, therefore, are not part of a system, but they can be a member of a network. Systems can be a member of a network as well.

Teaching vs. Non-teaching

Any hospital affiliated with a medical school is considered a teaching hospital. This affiliation can be in the form of a shared administration or organizational integration - the most important characteristic is that it is the setting for the education and training of medical students, residents, and interns. Academic medical centers have ongoing research projects or trials, often giving patients access to the newest procedures and treatments. However, these facilities also tend to treat a disproportionately high number of Medicare, Medicaid and uninsured patients, adding more costs to a facility already shouldering the additional costs of medical education. Teaching hospitals can also have lower quality scores because they tend to treat sicker patients.

Federal vs. State/Local

Medical facilities run by the federal government include Veteran's Administration hospitals and clinics, as well as hospitals run by the Department of Defense and the Department of Health and Human Services. Currently there are 207 federal hospitals in the United States. Some hospitals are operated by local state or county governments. Often, these public hospitals are also teaching hospitals. There are 951 public community hospitals in the US, but that number is steadily declining as financial burdens force facilities to close or become a part of a private system.

These are the major classifications for American hospitals, hopefully a meaningful way to look at what can be a confusing landscape of affiliations, funding sources, and membership. American healthcare is experiencing some major changes, however, with public and federal pressures to lower costs, make charges more transparent, and improve patient outcomes. As a result, we should be prepared for some of these categories to shift, merge, or be replaced.

Construction

Let's start with the construction of a hospital. Before a hospital can even be built (in most states), it must have a Certificate of Need, a regional assessment codified into law and using data and analysis from the Department of Housing and Urban Development (HUD) that shows that the additional beds are needed in the geographic area. The building permits and construction logistics are approved by the Department of Buildings, and the design is based upon best-practices set forth by the Facility Guidelines Institute for Design and Construction (FGI) and must meet the Health Care Facilities Code and the Life Safety Code. Finally, the building must meet standards of the National Fire Protection Association (NFPA).

Interiors

Now let's stock the hospital with furniture, equipment, computers, medicines, and cleaning supplies. Anything that touches a patient or enters the patient body is regulated by the Food and Drug Administration (FDA). This includes indwelling devices, pharmaceuticals, and syringes. Durable Medical Equipment contractors (DMEs) must be authorized by the Centers for Medicare and Medicaid Services (CMS), whose products are regulated bodies of their respective fields (endoscopes, beds, wheelchairs, etc.). The Drug Enforcement Administration (DEA) regulates the access shipment, storage, and distribution of controlled substances. Cleaning supplies, and any product that makes public health claims, are regulated by the Environmental Protection Agency (EPA).Telecommunications, from phone calls to mobile telemetry, is regulated by the Federal Communications Commission (FCC), which also provides remote or underserved communities with access to broadband to enable telehealth. The emergency helicopter is regulated by the Federal Aviation Administration (FAA), while the ambulances and mobile clinics are regulated by the Department of Transportation's Emergency Medical Services (DOT).

Staffing

With our hospital built and stocked, now we need to hire a staff. While each medical field has its own certification process, once in the building, employees fall under several regulatory bodies. The Department of Labor ensures that every employee is paid fairly, including overtime, under the Fair Labor Standards Act. The safety of employees is regulated by the Occupational Safety & Health Administration (OSHA) and the Health & Human Services/ National Institute for Occupational Safety

Patients

Our hospital is now ready for patients! There are numerous regulatory bodies that monitor health procedures and treatments - too many to mention here. But overall, the hospital's patient treatment program must meet requirements set by CMS in order to receive Medicare and Medicaid reimbursement. HHS, through Quality Improvement Organizations (QIOs), operates a federal program to improve quality of care and cost effectiveness. Accreditation of the hospital can be provided by three national groups, of which The Joint Commission (JCAHO) is the most widely-known. Grants for outreach to underserved patients are regulated by the HHS' Health Resources and Service Administration. Meeting the requirements of the Organ Procurement and Transplantation Network (OPTN) allows a hospital to provide transplant surgeries. Patient feedback is collected and reported by the National Research Corporation's Consumer Assessment of Healthcare Providers and System (CAHPS).

Behind the Scenes

And behind the scenes, we have the all-important administration of the hospital. Medical Administrative Contractors (MACs) are authorized by CMS to help hospitals file reimbursements. The Internal Revenue Service (IRS) provides non-profit hospitals with tax-exempt status and regulates how a hospital educates patients about their access to payment assistance. Patients are further supported by regulations from the Federal Trade Commission (FTC), which protects health consumers from unfair practices and health monopolies. Donations to charitable hospitals are regulated by the Treasury Department, which, along with the IRS, monitors patient access to financial assistance through the Affordable Care Act (ACA). In for-profit hospitals, the Securities and Exchange Commission (SEC) regulates investors as well as the markets where stocks in healthcare companies are traded. Any health care fraud, including insurance fraud, is regulated and investigated by the Federal Bureau of Investigations.

Hospital finances are a complex process, involving all the parts of a service provider, a retail business, an investment venture, and a non-profit organization. Investment in medical innovations require buy-in from anyone (and everyone) from physicians and nurses all the way to the CFO and CEO. In this section, we will introduce a series on the topic of how hospitals budget and spend money, and how an individual employee can use that information in order to bring an innovative idea to the right person at the right time.

Overview

First, a quick overview. Depending on the type of hospital, revenue will come into a facility from a variety of sources. Revenue streams include public payers such as the state and federal government, private payers such as insurance companies, donations and grants, and investments on financial assets. Expenditures tend to be more standard across the board, and separate budgets are made for operating and capital costs.

Operational budget

The operational budgeting process is completed annually and is based on past trends and future predictions. The biggest operational expenditure is staffing, including salaries and wages, benefits, and professional fees. The next biggest category is supplies, which includes anything consumable from food and pharmaceuticals to cleaning supplies, one-use products and medical instruments.

Capital budget

The capital budgeting process is completed over a long-term span, guided by the overall strategic plan for the healthcare facility or system. In this long-term budget, annual amounts are allocated for the purchase of durable goods such as beds, equipment, and building improvement/renovation.

Large capital purchases of fixed assets are not expensed all at once. Instead, they are spread out in a process called depreciation and amortization. Amortization takes care of spreading the cost out over the life of the asset, while depreciation takes into consideration how the age of the asset impacts its usefulness (and therefore, it's monetary value) over time.

Getting into the budget

So how does an employee wanting to adopt an effective innovation get that product into the budget? Often, hospitals will have set protocols for how new ideas are pitched and evaluated. The Agency for Healthcare Research and Quality suggests following a procedure to evaluate the product and its efficacy, and then to develop a business case for why and how it makes sense.

The goal is to justify the purchase by demonstrating that the innovation reduces costs (or keeps them neutral), increases revenue (could be by saving money), and addresses the overall strategic plan for the facility regarding quality and growth. (The ideal accomplishes all of the above.)

Larger expenses, including fixed assets such as major equipment, present a greater challenge for the individual excited about a promising innovation. Capital investments last a long time, so decisions made today will still be impacting the facility 5-10 years from now. Capital decision-making can take extra time, with adoption of an innovation (for example, making sure it it is specified in plans and blueprints) sometimes occurring years before its implementation. However, unlike operational costs, capital costs have the added cushion of having all that time across which to spread the costs. If the innovator is aware of these budgeting scenarios, they will be better prepared to bring their idea to the right person at the right time and in the right way.

The Case-Mix Index (CMI) has been defined in many ways. One definition might read "a relative value assigned to a diagnostic-related group." Another may be "a rough estimate of how sick a hospital's patients are." Yet another could be "an indicator of how much reimbursement is expected by the hospital." All these definitions point to one fact: The CMI is a measure used by a variety of healthcare personnel in a variety of ways. This week we will begin our exploration of this multi-faceted number.

MS-DRGs

So, where to start? Let's first look at a MS-DRGs, an essential component of the CMI formula. Hospitals are paid for services by sending the treatment data on a patient to a third-party payer (Medicare or an insurance company) and then receiving a reimbursement. To avoid hospitals sending these payers a bunch of invoices with all different kinds of data in different formats, the Centers for Medicare and Medicaid Services (CMS) decided to standardize the data in the 1980s, and the insurance companies followed their lead. The result was the creation of Medicare Severity-Diagnostic Related Groups (MS-DRG), 700+ standardized diagnoses into which all patients were sorted. All patients with pneumonia would be in the pneumonia MS-DRG, all heart transplant patients in the heart transplant MS-DRG, etc.

Diagnosis and severity

The MS-DRG further specifies the diagnosis by adding a degree of severity for each DRG:

with mcc: multiple complications and comorbidities | most expensive
with cc: complications and comorbidities | moderately expensive
without cc/mcc: no complications and comorbidities | least expensive

Each year, CMS assigns a weight to each MS-DRG based on the average cost to treat a patient in that DRG. Each of the degrees of severity (with mcc, with cc, without cc/mcc) has its own weight - lower for least expensive, higher for most expensive. That weight is also adjusted to account for hospitals facing unusual challenges, such as treating a high number of low-income cases or being a teaching hospital.

Codes and costs

On a case-by-case basis, a patient's MS-DRG assignment can be used by the hospital to anticipate treatment and costs associated with that patient. But if a hospital wants to anticipate costs on a macro scale, say, to determine the next year's budget, they need to have a big picture of the mix of patients - the mix of cases - being treated at the hospital. They need some kind of measure, or indicator, for that mix of patients. They need the Case-Mix Index.

Let's say a hospital's base unit of cost is $5,000 (that number could be lower in a rural hospital, or higher in a big city). A less complex MS-DRG such as pneumonia gets a number less than 1, because it costs less than that base unit of cost (MS-DRG .71, or $3,550). Complex MS-DRGs - like a heart transplant - take a lot of resources, so they get very high weights (MS-DRG 26.2, or $131,500).

Now for the macro, big-picture analysis. The CMI is one number capturing all the mixture of cases during a set period of time. It's a rough number, some might say a crude indicator, of what is taking place in the hospital, but it is still valuable. This is how it is generated: Add all the relative weights of each individual MS-DRG assigned during a set period of time and divide that number by the total number of cases during that same period of time. The result is the CMI.

The result is a kind of "average MS-DRG," much like a report card grade is a weighted average of scores earned over the course of a quarter, semester, or year. And that's the CMI!

Who uses the CMI

As a brief recap, the CMI is a number that represents the average severity (and consequentiality, cost) of patients in a hospital during a set period of time. Typically, higher CMIs mean more complicated services and as a result, more income, and lower CMIs mean less complicated services and lower income.

However, a hospital's CMI is only as accurate as its clinical documentation. To accurately code a patient's treatment, the physician must document each complication. The doctor's notes must then be accurately translated into DRGs by the medical coder. As a result, one of the groups most interested in CMI are those individuals responsible for Clinical Documentation Improvement (CDI), that is, the accurate recording and coding of the hospital's medical procedures. CDI professionals serve as an intermediary between the physician and the coder, making sure that all appropriate services are accounted for. However, private hospitals have the resources to invest in this degree of documentation, while many public hospitals do not. This leads to a financially painful situation for hospitals with severe cases and fewer resources.

The reason for this pressure on accuracy is that the CMI plays heavily into the financial health of a hospital. The CMI, because it is calculated using Medicare diagnostic groups, is an indication of the amount of reimbursement a hospital can expect. If the CMI used by the finance departments is inaccurate, then the hospital budget is inaccurate, spelling a possible disaster for the facility.

The CMI also provides an indication of financial risk. Monitoring the ongoing CMI - which can be easily calculated internally, gives the C-suite advance notice of dips in income, allowing them time to make adjustments to compensate. In this way, the CMI supports efficient resource management.

How do you put an economic value on a human life? Why would you ever want to? As difficult as this quantification may be, it is a necessary practice in healthcare when evaluating the efficacy of an intervention, the appropriation of resources, as well as the framing of options for both the individual and a population. Two measures attempt to accomplish this valuation: Quality-Adjusted Life Years (QALYs) and Disability-Adjusted Life Years (DALYs). In the next series of sections, we will explore both these measures, and ultimately discuss how they are used in the field of infection control and prevention.

Put simply, "QALYs are years of healthy life lived, DALYs are years of healthy life lost." Both measures consider years lived and quality of life, but while QALYs use "utility weights," that is, what the patient can do despite the medical condition, DALYs use "disability weights," that is, the burden of the medical condition on the patient. QALYs measure quality of life gained while DALYs measure years lost to disability and/or premature death. So how are these measures determined?

QALYs

Would you rather live 10 years with a disease or 7 years in perfect health? How about 5 years of perfect health? Would you take the risk of a healthcare intervention to cure that disease if there was an 80% chance of cure but a 20% chance of death? How about a 10% chance of death? These are the questions used to determine an otherwise hard-to-measure concept: quality of life. Using lessons from game theory, which attempts to pick out the complex choices used in decision-making, researchers came up with two ways to put numbers to quality of life.

NOTE: The following two methods are used with test subjects who are not considering health treatments. These methods are not used when actually helping a patient make decisions, only to help inform the patient and researchers about how large groups of people feel about similar questions.

The Time Trade-Off

The first is called the "Time Trade-Off," and asks those participating in the survey to choose between x number of years with a condition vs. y number of years in perfect health, varying x and y until the individual is no longer willing to "trade off " years lived in exchange for health. For example, someone is asked whether they would be willing to live 10 years with their current health state of, say, diabetes, or 7 years of perfect health. In response to this completely hypothetical scenario, they choose 10 years with diabetes as preferential to 7 years of perfect health. The iterative questions continue, with the option of 10 years with diabetes or 8 years of perfect health. The questions continue until the individual is indifferent about the choices; they feel both are equal. If the final numbers are 10 years with the condition and 8.5 years of perfect health, the "value of health" reduction of the condition would be 15%. For this condition, the average score reveals that living with the condition reduces quality of life by 15%.

Health utility value

Both of these measures results in a "health utility" value, which researchers can use in their formulas to calculate QALY: The change in health utility value multiplied by the duration of the effect of the intervention = the number of QALYs gained. The QALY is expressed as a number from 0 to 1, with 0 being no quality of life (death) and 1 being full quality of life at perfect health. The goal of interventions under this model is not necessarily to reach 1, but rather, to demonstrate gains from, say, a .4 to a .6, which would be expressed as "a gain of .2 QALY." Of course, one person's ".6" may not be another person's ".6," but a gain of .2 has been demonstrated to be consistent enough to make medical decisions.

QALYs are often used to measure cost-effectiveness of an intervention, especially in countries where mortality is already reduced (allowing quality of life to be given greater priority, most often, high-income countries). QALYs can be helpful in choosing between two health interventions, especially when one is riskier than the other, as it informs the patient about what they can expect to see in improvements and allows the patient to consider choices alongside risks.

DALYs

In contrast to the Quality-Adjusted Life-Year (QALY) use of huge individual surveys to gauge a person's perception of quality of life, DALYs use expert medical opinion to quantify the burden of disease in terms of number of potential years of healthy life lost due to premature death. DALYs are calculated based on the severity of the disease, with each condition given a numeric value determined by medical experts.

Helpful comparisons

DALYs allow researchers to compare the disease burdens of two or more conditions on a population. A policy-maker or healthcare system may consider the impact of heart disease and diabetes (two leading chronic conditions) on a population when deciding where to invest development funds. If heart disease DALYs show reveal more years of healthy life lost compared to diabetes, the decision-maker may choose to invest in preventing heart disease rather than diabetes.

Helpful with populations

DALYs are useful when looking at a population rather than an individual, as each patient will vary in their response to a disease and an intervention. Because of this big-picture approach, DALYs are very limited in their ability to examine disease burden by characteristics such as age, gender, socioeconomic status, race, pre-existing conditions, geographic location, and other social determinants of health. The Global Burden of Disease provides tables and rationale for over 350 conditions, allowing researchers to use standard metrics as a part of their data analysis.

As with any metric attempting to quantify an aspect of the human experiences, QALYs and DALYs have their weaknesses. In the case of QALYs, the quality of life for a given condition tends to be lower according to a person who has never experienced the disease or disability (those who have experienced it and learned to cope tend to rate the quality of life higher). DALYs, because they do not consider the variation in burden over the course of a disease, may not provide the necessary picture of the burden of living with a disease, both for the patient and society. Additionally, DALYs do not consider how a specific disability might limit a patient differently depending on social, economic, or built environments (a person without use of their legs will be more limited in an environment with low resources compared to a person with substantial resources). Despite their weaknesses, however, these two measures do provide needed quantification that, if used correctly and without losing sight of limitation, can be helpful in making healthcare decisions.

DALYs and QALYs + HAIs

The use of DALYs and QALYs intersects with infection control and prevention any time a cost analysis is conducted. These two measures allow decision-makers to determine the disease burden on their bottom line as well as on the quality of life of their patients, in a first step towards drafting a mitigation strategy. Once several interventions are proposed, several approaches are possible:

A cost-minimization analysis can be used when comparing interventions whose clinical benefits are the same, and only the costs are different. This is the simplest type of cost analysis, as the fewest attributes are considered.
A cost-effectiveness analysis uses clinical outcomes as a point of comparison, examining each intervention in terms of life years gained or infections avoided. The challenge of this analysis is that researchers do not always use the same clinical measures.
A cost-utility analyses is similar to the cost-effectiveness analysis, but adds quality of life to the calculation. The use of this standardized measure allows for more direct comparisons between interventions... but only if the QALY was estimated in the research.

The future of infection control research and economic analysis

And this brings us to the future of infection control research and economic analysis. A growing number of researchers are pushing for the more standardized approach of integrating QALYs into every economic analysis of interventions. Instead of examining only the change in financial costs due to an intervention, this will also consider the health costs as well.

Accomplishing this worthy goal will have its challenges. Cost-utility analyses are best conducted alongside randomized control trials, of which there are few in the field of infection control. Because there are so many different ways to prevent an infection, isolating target interventions is difficult to model. Additionally, the ways pathogens transmit within a healthcare facility are numerous and complex, involving the built environment, staff, patients, visitors, moving equipment, and room changeover. Even if modeling is achieved, however, the estimates for "utility" for hospital-associated infections (impact of HAIs on daily life) range widely between sources, meaning that the field cannot agree on the disease impact on quality of life. Finally, because hospital-associated infections are, in most case, a short-term condition (a shorter "adjusted health state"), calculating a QALY for such a relatively short time can result in a relatively small adjustment. This small change is more meaningful across populations, however, and some HAIs do have a longer reduced health state (such as Clostridium difficile Infection).

QALYs and DALYs for HAIs

So what are the QALYs and DALYs for HAIs? Individual studies have come up with different burdens, which vary due to populations and infections. One large study in Japan, for example, found that hospital-acquired bloodstream infections (CLABSI) were responsible for 137.9 DALYs per 100,000 population, a number that was potentially impacted by the higher numbers of elderly in the population and the higher incidence of MRSA in Japan. A computer model study from 2010 demonstrated that the incremental cost-effectiveness ratio of a MRSA screening strategy was affordable in terms of QALY, which was part of a body of work that resulted in today's almost-universal MRSA screening of pre-operative patients. The closest we could get to a direct DALY-per-infection calculation, however, was a study using European data points. According to their calculations, for example, HAI pneumonia resulted in 67 years lived with disability (YLD) per 100,000 population, with 169 Disability-Adjusted Life Years (DALYs). Full data can be found here.

Determining QALYs and DALYs in HAI research can be extremely helpful when communicating the importance of effective and long-lasting interventions. These measures help demonstrate disease burden not just in terms of cost in dollars to hospital or taxpayer, but cost in weeks, months or years to the patient. Most importantly, they remind us that these costs are avoidable in at least 70% of HAIs, representing decades of years and billions of dollars lost each year. One ways they are avoidable is by removing reservoirs for pathogens and replacing them with biocidal surfaces. Copper-infused materials on bedrails, overbed tables, and workstations can kill bacteria before it has a chance to reach a vulnerable host and cause an infection. Investment in preventive biocidal surfaces is a long-lasting intervention, with no additional work required by staff, that can continuously avoid infection and therefore avoid disability and reduced quality of life.

Anyone familiar with the world of corporate sales is familiar with the concept of a price list that does not reflect what a customer will actually pay. In the marketplace of products from cars to furniture there is an inflated price list followed by negotiations leading to an actual final price. The price lists serves as a starting point for those negotiations, and that starting point can be very high.

What is the chargemaster?

In healthcare, the price list is called the chargemaster, or charge description master and it is considered the "central mechanism of the revenue cycle." This massive list of every billable medication, procedure, service, fee, room charge, supply, or evaluation can run up to 50,000 items, and each item has associated codes for billing and tracking purposes. Each list is unique to the individual hospital, and is created by a team made up of professionals, including the chief operating officer, the chief compliance officer, and members of the Board. So carefully are these lists created and updated, they are considered proprietary information that is protected as closely as any trade secret.

Who sees the chargemaster rates?

The first and largest group that sees the chargemaster rates is health insurance companies as they negotiate what they are willing to pay for each item. These negotiations occur every year or every other year.

The second group is much smaller, but has a far more personal experience with the chargemaster rates: The uninsured patient. Patients without insurance are automatically billed the chargemaster rate, which is, in many cases, highly inflated (the average is 4x the actual cost). As a result, many hospitals will offer discounts and lower rates to uninsured patients, to bring those costs down to a more realistic and manageable level.

How does publishing the chargemaster rates help the consumer?

With the new requirement to publicly post prices (and no penalties for not publishing them), many hospitals are taking the approach of just publishing their chargemaster lists (see some here). While this may seem like providing the public with a "look behind the curtains," these lists are in fact incomprehensible and unusable -they do nothing to help create accurate predictions of costs.

First, the raw data is intended for an audience familiar with the acronyms, abbreviations, codes, and descriptions of tens of thousands of items. Even in the healthcare world, there are very few people with that skill set. Second, even if a person is able to decipher the listing information, cobbling together all the individual items needed for a prospective procedure is nearly impossible for the general public. A prospective patient does not know the range of tests, procedures, supplies, drugs, fees and equipment that might be used during his or her stay.

So what's the point?

Some would argue that this public access to chargemaster rates are a good first step towards increasing transparency in healthcare. And on a macro scale, this may be true, as they give a look into the big picture of how hospitals charge for services and may inspire helpful changes. However, so far, the benefits to the average consumer are proving elusive. Perhaps future changes will include posted average costs for common procedures (childbirth, knee replacement, etc.), providing consumers with a better way to compare prices and push hospitals to be more competitive.

The chargemaster is just one aspect of the incredibly complex nature of healthcare economics. We are in the midst of a transition in the way we provide, charge for, and pay for healthcare. One of the first issues being tackled is getting to a point where hospitals actually know how much everything they provide actually costs, and eventually, getting to a point where healthcare costs can be stabilized. Until that point, the consumer bears the responsibility of deciphering the mountains of data and making the best healthcare choices alongside their medical team.

Key Terminology