The charges or cost of medical treatment for similar conditions or illnesses varies in different hospitals or physicians’ offices. Whether you are planning to pay cash or through an insurance company, both ways proves difficulty in estimating the cost of the medical bill in any hospital. Why do different hospitals /offices charge different amounts?
The reputation of the hospital has a significant effect on the number of patients that wishes to seek the medical services in its facility. This is even after institutions such as the Agency for Healthcare Research and Quality advice to consumers that the reputation of the facility contributes little too clinical quality scores of any specific hospital. The management of the hospital with high demand among the patients in most instances compels them to raise costs to comply with the demand and supply of their medical services. Even though the hospital’s reputation builds confidence when seeking treatment in their facility, you should not consider such trait to mean that are assured of quality services.
The Readiness or Availability of Multiple High Capacity Medical Services
Multiple high capacity hospitals or offices tend to charge more compared to the medical facilities with a limited number of medical specialists. Hospitals with a wide range of specialists’ services face little competition, and most of them feel free and secure to raise their charges. Medical care industry just like any other service providers or retailing industry also raises the prices when the services they are offering are not readily available. Such situation also creates a monopolistic situation and causes the cost of the medical bills to increase or even raise way above the normal rates.
The Capacity of the Medical Facility
The medical facility capacity also influences the charges or cost of the hospital bill. The number of beds in a hospital is well-known to influence what a hospital can charge in a system like fee-for-service (FFS). A hospital capacity growth is also indicated by a factor like the ability to provide wide or certain medical services. This high capacity ability increases competition among the healthcare providers which in most instances lower the prices. The high capacity facilities can as well increase the demand for some facilities because of the perceived growth or high-level medical care.
Charge Description Master (CDM) Lists
This also applies to those patients whose payment plan is through an insurance company. The CDM contains a list of the costs of the medical services and billing identifier codes that are used by medical billing professionals as the hospital prepares the final amount to bill patients and insurance companies. The maintenance of chargemaster list and prices are also recommended by the American Health Information Management Association (AHIMA). Different hospitals maintain their different chargemaster list, hence the reason why the medical bill amount will vary.
The above information is important for any patient to understand when wonder why do hospitals /offices charge different amounts. This is also the information that institutions such as an insurance company use to negotiate the price of the medical bill for their clients as well. When in need of estimating the level of your medical bill, the above details can help, or you can also seek assistance from an insurance company.
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