In an effort to assist patients in understanding the cost of hospital services, the Hospital Price Transparency rule at 45 C.F.R. § 180.10 et. seq., effective January 1, 2021, requires all hospitals to make public their discounted cash prices. I wanted to see if select New Mexico hospitals were complying with the law and review their prices.
For many years, the Surgery Center of Oklahoma in Oklahoma City has been a paragon of pricing transparency. It lists the prices for its most popular surgeries on-line. The posted prices contain the following disclaimer: “The prices for the procedures listed on this website include the facility fee, the surgeon’s fee, and the anesthesiologist’s fee. The initial consultation with the surgeon is also included, as is the uncomplicated follow-up care.” The center’s primary customers are patients with no medical insurance or those with very high deductibles. I have seen stories that a significant number of the patients are Canadians who would rather pay cash for a procedure now than to wait months or years for surgery in the Canadian health care system.
How do the cash prices at the Surgery Center compare to those of the major hospitals in the Albuquerque-Santa Fe area?
I chose three routine surgeries: laparoscopic cholecystectomy (gall bladder removal), cataract surgery (one eye) and knee arthroscopy. The Surgery Center listed prices are $6836 for gall bladder removal, $4800 for cataract surgery on one eye and $4458 for arthroscopy on one knee and $6215 for two knees.
At the Presbyterian Health Services web site, there was no price estimate for cataract surgery. For knee arthroscopy the cost for one knee was $14,860 or a discounted cash price of $10,402. For laparoscopic cholecystectomy, the cost was $23,596 or a cash price of $16,517. The prices did include physician fees.
For Lovelace, I could only find one direct comparison. For gallbladder removal the listed price is an astonishing $89,094 or a cash discounted price of 70% off of $26,728. I could find no on-line estimate for cataract surgery. I could also find nothing for knee arthroscopy. I did find a price for knee arthroplasty at $95,733 or a cash price of $28,720. There was no indication that the estimates included physicians’ fees.
Christus St. Vincent has a primitive price comparison tool on its website. I could find no on-line estimate of the cash price of any of the three procedures using the no insurance search option.
It appears that a private for-profit surgical center in Oklahoma City is charging cash prices for surgeries that are substantially less than those charged by several public not-for-profit hospitals in New Mexico. How can that be?
I reached out to Presbyterian, Lovelace, and Christus St. Vincent asking for comment. I emailed each a draft of this article and gave each four days to respond. The only response I received was from Lovelace asking which paper I was going to try to have this article published in.
Here’s a quote from the webpage for the Surgery Center of Oklahoma explaining, in part, why it can charge less than its competitors:
“It is no secret to anyone that the pricing of surgical services is at the top of the list of problems in our dysfunctional healthcare system. Bureaucracy at the insurance and hospital levels, cost shifting, and the absence of free market principles are among the culprits for what has caused surgical care in the United States to be cost prohibitive. As more and more patients find themselves paying more and more out of pocket, it is clear that something must change. We believe that a very different approach is necessary, one involving transparent and direct pricing.”
For New Mexicans who have high medical insurance deductibles or who are self-insured, I strongly urge them to consult the prices at Surgery Center of Oklahoma before getting surgery in New Mexico. If the prices being charged in New Mexico are substantially higher, an explanation is in order.
Charles Sullivan is a retired attorney who has lived in New Mexico for over 40 years.