MedInfo Health Line

The Cost of Hospital Oxygen

As a medical director in a hospital, I had first hand experience in how hospitals charge for their services. I’m a pulmonary doctor and was in charge of the Respiratory Therapy Department. According to the Joint Commission that accredits hospitals, the medical director was supposed to be involved in setting the charges for all services rendered.

One day, my technical director came to me and said that as he was going over the department charges, he found that the charge for oxygen had increased from 75 cents an hour to three dollars an hour without input from him or the department. This added $72 for 24 hours of oxygen to my respiratory patient’s hospital bill instead of $18. We researched the mechanism and noted that our respiratory therapists entered the hours of oxygen into the patients computer account which then converted it to dollars without any of us knowing the final charge. We determined the cost of the oxygen at less than 25 cents an hour.

We then made an appointment with the assistant administrator that was in charge of our department and expressed our concern. He said that he had authorized these progressive increases and the hospital still had not determined the maximum that Medicare, Blue Cross, Blue Shield, and other insurance carriers would pay. In fact, since everyone was paying the $3, he had already authorized the next increase to $3.50 an hour.

I was told quite firmly, “Isn’t getting the money in our prime objective?” It was then that I became aware that costs had nothing to do with what hospitals charged. To charge 14 times what the cost of oxygen was did not seem to the hospital to be gouging the unsuspecting sick patients, nor did they even think it unethical. They were busy building, what European doctors call, large palaces for their patients. All this extra money allowed each hospital, no matter how small, to have facilities that even the large metropolitan hospitals in other countries could not afford.

Is it any wonder that the HMOs and government has now clamped down on everyone in the healthcare business even though 90 percent of the gouging was done by hospital and other suppliers? The important message is that we all have to keep our eyes open to abuses. When you receive a hospital bill, be sure to check it very carefully to make sure charges are appropriate. Even better, monitor every charge while you’re still receiving care. If you don’t get satisfaction with the hospital or insurance company, you may call 916-497-1434, or send a copy of your excessive bill to the address given.


Cape Coral Hospital Fraud

The Cape Coral Hospital is now the famous “merger gone awry.” This nonprofit facility which opened in 1977 became this coastal town’s largest employer and favorite charity, attracting many volunteers who even had to pay to be volunteers. The town’s most prominent citizens were on its board. In 1994, this profitable nonprofit hospital was on the brink of failure, losing $1 million a month putting it in danger of defaulting on its bonds. The administrator suggested that these were hard times and they would have to merge like other hospitals all over the country… Same story, but this time a different verse.

It turns out the hospital administrators were using hospital funds to build luxury homes, buy diamond rings, pay for golfing trips to Scotland, and buy an island resort and a strip mall. Soon the hospital directors participated in shady deals. One even billed his insurance company for medical care he obtained free from the hospital. This would all have gone unnoticed had it not been for one director who became suspicious and suggested hiring an outside firm to examine the hospital finances. The hospital administrators all resisted. The suggested examine finally passed by a vote of 7 to 6. With one less vote, the hospital administrators and involved directors would have made off with half-million dollar homes and millions of assets that were stashed away.

Think this is bad? The IRS agent in charge of tax exempt organizations said that exploiting charitable assets for personal gain isn’t extraordinary in the inbred world of nonprofit hospitals. The corruption of business leaders with doctors makes things ripe for this to happen. He said that cases linked to health care fraud are up 60 percent this year. So, when your hospital says they can’t make it in this competitive world, just ask for an outside audit. There’s plenty of money in the health care industry if it’s focused to patient care.


Hospital Costs

The CEO of a large insurance company wrote a letter to the editor of a newspaper about how he was trying to reduce health care cost by cutting hospital stays. He quoted an example of sending mothers home on the same day of delivery. This was an unfortunate example since most mothers already go home in a day or so after delivery.

This may be the wrong emphasis in controlling cost. Doctors have been very successful in reducing hospitals days as safely as possible. But we’re finding out it may not have decreased hospital costs.

Surgeons, for example, have developed laparoscopic techniques to remove gallbladders, appendices and ovaries through a tube inserted into the abdomen. This has drastically reduced hospital stays from, in many cases, five days to one day.

Doctors naively assumed that the hospital charge for a one-day hospitalization would be about one-fifth the charge of a five-day stay. I was shocked when my patient brought in her hospital bill indicating a $15,000 charge for taking out her gallbladder, especially since she was only in overnight. The full five-day stay under the DRG Medicare system was less than $10,000.

In our example above, the insurance CEO is making a hundred doctor’s salaries by getting the doctors to risk their patients health in sending them home the same day of delivery. In the hospital example, the charges are increasing despite a false guise that they are trying to reduce costs by sending gallbladder patients home in one day. Doctors are being blamed for doing too many surgeries when, in this example, the surgery should have cost 80 percent less rather than 50 percent more. It appears that anything physicians do to decrease health care costs will be subverted by others into an increase. It’s time we put the blame where it belongs.

These messages were written in the years as noted and may be somewhat dated at this time. Please consult your physician or other health care provider.


Mega Hospitals

Hospitals have convinced doctors and the public that getting larger is more efficient. Many of our local hospitals are selling themselves to large hospital systems, telling the medical staff that service to them and their patients will be just as personal. Others are just getting larger under the name of efficiency and improved ability to compete. But what is being said and the effect on patient care may be disastrously different.

In our community, eight hospitals have become a two-hospital system of 5 and 3. In addition to the obvious efficiencies of larger purchasing power, the other so-called benefits may not be beneficial. For example, the medical staff services and medical transcription has been consolidated for all five hospitals in one system. Can you imagine how frightening it is to walk into your own medical staff office and no one knows you in the very institution in which you make a living? This can be horrifying.

Also, the five transcription services consolidated to an off-sight contract service. This may make the patient’s history and physical report, the basis for the entire medical record, totally irrelevant. My first transcription to an off-sight transcription pool was totally unrecognizable, both to doctor and patient. It was the type of thing that occurs when a legal transcriber fills in for a medical transcriber and the words are unfamiliar. The transcription was on the chart for several days before even I recognized that it might be mine. It served no useful purpose in the care of this patient. It was not corrected during the five-day patient stay. It was still not corrected when the final summary was dictated.

Information is critical for medical decision making of life and death issues and must readily be available. When business decisions are made without medical input, patient care is compromised. We must always be on guard.