Data Sample: Hospital Charge Index®
Pricing is certainly a hot topic right now with the disclosure requirement becoming effective on January 1, 2019. The Hospital Charge Index® helps hospitals understand how high or low they are relative to peers for both inpatient and outpatient charges. The metric utilizes total claim charges and is adjusted for resource intensity and cost of living. Because the new requirement includes a provision to display average charges by MSDRG, the Hospital Charge Index® can help busy executives evaluate encounter-level charge comparisons for their hospital to any other in the country in one central place. As seen in the data display, there are several low-charge states and MSAs in the New England area. Maryland – and the Baltimore MSA – continue to be the lowest charge benchmarks nationally as the state has strict price and payment regulations. Still, these low charges don’t always translate to lower payments as Maryland and Massachusetts are two of the top three highest payment states as measured by Net Patient Revenue per Equivalent Discharge™. The State of the Hospital Industry publication highlights several other interesting points about relative charge positions nationally. Among them, higher charge hospitals tend to be larger, urban facilities that also tend to have a less favorable payer mix which creates upward price pressure to recover payment deficiencies. Proprietary facilities, as a group, also have higher median charge levels than other organization types. And, finally, while many in the industry question the connection between gross charges and net revenue, there are significant charge differences between high and low operating margin groups.
To see more detail on the data above and more than 80 other metrics of hospital performance, click here for the 2018 – State of the Hospital Industry”