“The Third Rail of Payment Reform”–Tackling Wide Variations in How Much Providers Charge

Why do some hospitals and doctors charge far more than others for exactly the same routine procedure?  

“Because they can; it’s not any more sophisticated than that,” says Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management.

Anderson was responding to a reporter’s question about huge disparities in how much insurers in North Carolina pay different hospitals. The answer is simple, he says: large brand-name providers such as Duke have the market clout to insist that insurance companies pay them top dollar. If they don’t, these marquee hospitals won’t join the insurer’s network, and potential customers will choose another health plan. Because they have market power, Duke and UNC Chapel Hill  are able to raise prices every year: “Duke by 6 percent, UNC by 5 percent,” Raleigh’s Newsobserver reports. 

Some hospitals are forced to hike charges just to stay afloat.  Not Duke.  In 2011 this non-profit medical center reported an operating profit of $190 million, or 8 percent. Investment income  pushes profits to $542 million.

An audit of UNC Hospitals reveals “a total profit of $133 million, or 12.3 percent. . .  They’ve made their money largely from employer-sponsored health insurance . . .  often inflating prices on drugs and procedures – sometimes to three, four or 10 times over costs,” a team of Newsobserver reporters led by Joseph Neff explains.  

Over the past decade,  Duke’s revenue has risen faster than the cost of treating patients – and much faster than inflation: “Duke saw its total patient revenue rise 100 percent from 2000 to 2010” while “its costs rose 83 percent. The average revenue from each inpatient t more than doubled over that time, rising at more than three times the rate of inflation.”

“Unlike insurance companies, which are easy to dislike, hospitals are easy to love,” Neff et.al. note “They save lives every day, while providing care for people who can’t afford it.” Thus “in the national debate over health reform, soaring costs and insurance premiums have drawn attention. But one trend driving costs – the growing market power of hospitals – has gone largely unnoticed.”

Over time, they add, North Carolina’s brand-name hospitals have “solidified their market power by stashing billions of dollars for future purchases.  Duke, for example, has reserves of $1.5 billion. In Charlotte, Carolinas HealthCare System has banked more than $2 billion.”  By contrast, institutions that lack market power don’t fare as well:  “About a third of North Carolina hospitals – most of them small and rural – reported losing money in 2010.”

Often these are the hospitals that are providing a public service by caring for Medicaid patients.  In August, Massachusetts issued a report on health care spending trends which noted that “Hospitals serving a higher proportion of publicly covered patients lack market leverage in negotiating with private payers. This results in lower private-payer prices for those hospitals, compared to hospitals with a greater share of private payer patients.”  Thus, rich hospitals become richer, and poor hospitals that serve low-income patients become poorer.

 When Insurers Pay More, They’re Reimbursing for “Reputation”

In 2010, when the Center for Studying Health System Change (HSC) analyzed 12.2 million claims paid by health plans in 100 metropolitan areas, it found eye-popping variations in what different providers fetch, not just across markets but in a given market.   In Los Angeles, for example, private insurers paid some hospitals less than Medicare allows for inpatient care, while others received 184 percent of Medicare rates.  

One might assume that better-paid hospitals were seeing sicker patients, or providing better care. But “Medicare rates adjust for the severity of a patient’s illness,” HSC’s Paul Ginsberg points out. As for the notion that insurers were paying for quality, until very recently, few for-profit insures even attempted to compare the quality of care that different providers offered. How, then, could they be paying a premium for better outcomes? Moreover, as Ginsberg observes, “it is unlikely costs associated with differences in quality . . . would be as large as the differences in payment rates.”

Research just published in Health Affairs confirms “essentially no correlation” between price and quality. In this study the researchers began by rating the quality of care offered by 250,000 physicians nationwide. Then they zeroed in on doctors who ranked in the top 25%, and looked at what insurers paid them.  At this point, the yardsticks that we have to measure quality are rudimentary, but it’s fair to assume that the physicians in the top quartile all provide “good” to “very good” care.

Nevertheless, reimbursements for specific major medical procedures varied by as much as 250%.  While some doctors in this elite group were paid $6,150 for an uncomplicated vaginal delivery, others commanded $12,090. The price for decompression of a herniated disc ranged from $7230 to $17,680.

This study also controlled for disease severity or complexity as well as differences in costs in different geographic areas. Yet when doctors treated common chronic conditions, payments varied 15-fold. Meanwhile, researchers found that doctors who met efficiency benchmarks actually charged 15% less than others, suggesting that, under reform, there is plenty of room to lower costs while improving care.

Annual rankings in U.S. News & World Report give some hospitals a reputation for better quality. How do they win a  top spot on this list?  Sometimes, just by charging more. Ironically, higher prices are are a plus for how the public perceives a medical center: most people just assume that more expensive care must be better. Few realize that market leverage, rather than quality, determines how much insurers will pay. (Appearances also count: marbled lobbies, waterfalls and expensive art make an impression.)

Yet when treating patients, the most prestigious hospitals don’t necessarily follow “best practices.”   Just this month, when the Joint Commission issued a list of 620 “top-performing hospitals” (representing roughly 18% of the nation’s accredited institutions) some of the nation’s best-known academic medical centers did not turn up on the winners’ list..  (Johns Hopkins and Mass General, for instance, did not make the cut. In fairness, it should be noted that Duke did.)

 Granted, the benchmarks the Commission used to grade performance didn’t try to evaluate “outcomes.” (As I explain in the post below on “Market Competition” outcomes evaluation is an infant science. We’re still exploring what a “good outcome” means.)

Instead the Commission focused on “process:” Did someone remember to give an aspirin to the heart attack patient? Did they provide anti-stroke medications to a stroke patiens at discharge?”  Ultimately, we would like to grade providers on both outcomes and process. But for the time being, these performance markers tell us something mportant about a hospital’s attention to vital details. Unlike U.S. News & World Report, the Commission’s report goes  beyond an institution’s “perceived reputation” to look at medical evidence.  (Hat tip to Kent Bottles, M.D. )

Doctors themselves acknowledge the importance of these markers. Six or seven years ago, when a study at Duke revealed it failed to meet “best practice” standards in a number of areas (forgetting to give elderly pneumonia patients a vaccine to protect against another bout of the disease, for example), most physicians at Duke were unaware of  the holes in their routine. If asked, they would have said, “Of course, we always give the vaccine.” 

When they saw their record, they were flabbergasted. Dr. Robert Califf, a professor of medicine at Duke told me “It’s like the Elisabeth Kubler-Ross stages of grief. First you’re in shock, then, denial, and then you gradually come to terms with what needs to be done.”

This migiht be  one reason why Duke is now making the Joint Commission’s list. Performance evaluations have their limits. But if an instituion takes them seriously, they can serve as a valuable wake-up call.

The Big Picture 

North Carolina is hardly unique.  Across the nation, hospitals have been consolidating, and when they do, they flex their market muscles.  Few insurers are big enough to stand up to them. “What you’re seeing is increasing market power on the part of the hospitals and increasing leverage in negotiation with the payers,” says Dr. Kevin Schulman, who teaches medicine and business at Duke

Medicare is the one payer that has maintained its market clout. Because of its size, even brand-name providers don’t have the market leverage to command premium prices from Washington.  No hospital could keep its doors open without Medicare patients. And despite troubling rumors that physicians will stop accepting Medicare, the vast majority need older patients to keep their appointment books full.  This explains why roughly 90 percent of doctors continue to accept new Medicare patients.

 Many argue that Medicare under-pays hospitals. This, they say, is why providers must charge private insurers more.

Without question, in many cases Medicare does pay less than what it costs a hospital or doctor to treat a particular patient.  Moreover, there are serious variations in how well Medicare reimburses in different parts of the country.

 Nevertheless global data (which provides a snapshot of average reimbursements nationwide) reveals that, overall, Medicare pays hospitals between 93% and 97% of what it costs them to provide care, while private insurance pays between 115% and 125% of those costs.  

“Even that crude data suggests that private insurers are paying hospitals far more than they need to make up for underpayment by Medicare,” notes Dr. Pat S  in a memorable HealthBeat  guest-post on hospital costs and Medicare payments.         

 “Examine the payments to individual hospitals in more detail, and you discover that many hospitals actually make a profit on most Medicare patients,” he adds. Even the American Hospital Association acknowledges that  “42% of hospitals make a profit on Medicare,”

 “In the remaining hospitals,” he writes, “most Medicare patients are profitable.  Losses on Medicare patients are related to a minority who need much more care than average because of longer stays, more complications, and underlying health problems.” ( Sometimes those complications are related to preventable errors. If the hospital focused on patient safety, it might not lose money on some of these patients.)   “Since the profits on most Medicare patients are small,” Pat S. adds, “large losses on this small number of outliers can drive overall payments below costs.”

In a later HealthBeat post, I analyzed a 2010 Medicare Payment Commission (MedPAC) report on hospital profits which reveals that, in 2008 , thirty-seven percent of hospitals enjoyed positive profit margins while caring for Medicare patients– and 2008 was the toughest year hospitals had seen in fourteen years. 

Ultimately, MedPac’s in-depth analysis of Medicare payments and hospital profits over a period of time suggests  that when hospitals are under some financial pressure, and are forced to become more efficient, they can, in fact, make money on  seniors. After adjusting for difference in patient mix, wages, outliers (extremely ill patients), the costs of teaching, and the effect of low-income Medicare patients, researchers discovered that when private insurers cut reimbursements, and  hospitals are forced to tigthen their belts, many wind up making money  on Medicare cases.

Ironically the hospitals that lose money on Medicare patients tend to be those that  are enjoying profit margins of 5 percent –or more–when treating privately insured patients. (For a non-profit a 5% margin offers a comfortable cushion).  

That hospitals tend to be less efficient when private insurers are paying them generously shouldn’t come as a surprise. Like most  of us, hospitals spend lavishly when plenty of money is available. When money is tight, they are much more likely to focus on improving systems with an eye to cutting waste and co-ordinating care.

This is why the Affordable Care Act purposefully puts hospitals under some financial pressure  by shaving annual increases in Medicare payments by one percent a year over ten years. The goal is to give hospitals time to figure out how re-design core processes such as scheduling elective surgeres in ways that will lead to safer, better care.

When Powerful Hospitals Acquire Physicians, Doctors’ Fees  Soar–Though This May Change

It’s not just marquee hospitals that charge more. Large specialty practices with a presence in the community enjoy market leverage.

And when physicians are employed by hospitals, the Wall Street Journal reports that those institutions use their market heft to lift doctors’ fees by as much 30 or 40 percent.   The “bounce” can be  even greater, notes the Incidental Economist: “Blue Shield of California said that after one group of physicians based in Burlingame, Calif., came under the umbrella of the powerful Sutter Healthsystem in 2010, its rates for services increased about 140%. The insurer said it saw a jump of approximately 95% after a Santa Monica, Calif., group became part of the UCLA Health System in January 2011.”

But  under Obamacare, “rewards for physician acquisitions, based on the pay differential between independent doctors and hospital systems, are likely to vanish,” writes WSJ columnist Anna Wilde Mathews. She quotes Kenneth Paulus, chief executive of Minnesota’s Allina Health:  “That ship has sailed.”  Under the ACA, he suggests  hospitals won’t be jacking up their physicians’ fees because, ultimately, few will be reimbursed fee-for service. Instead, many physicians and hospitals will be paid a lump sum for managing the health of an entire patient population. 

 The Next Wave of Reform: Massachusetts. Addresses Variations in Provider Pricing

Today, some payers are beginning to take on what Nancy Turnbull, associate dean at the Harvard School of Public Health, calls “the third rail of payment reform– unwarranted disparities” in providers’ prices that have been “well-documented in recent years by the Massachusetts Attorney General’s office.”    Those AG reports made it clear that elite providers were driving heatlh care spending.

When it comes to universal coverage, Massachusetts is six years ahead of the rest of the country. Today 98.1 percent of the state’s adults and 99.8 percent of its children have health insurance. But the cost of medical care is soaring, in part because Massachusetts is home to so many powerful hospitals and doctors. In 2010 and again in 2011, the state’s Attorney General (AG) issued sharply-worded reports charging that the state’s insurers are not reimbursing for “value” but instead are responding to “market leverage.”

The AG noted that when the same doctor does the same procedure in two different hospitals, insurers will pay him 44% more when operating in a brand-name institution.

The Commonwealth is continuing to take a hard look at what providers are charging. Last month Massachusetts issued a report showing that increases in reimbursements to providers explain about half of the growth in outpatient payments from 2007 to 2008, and virtually all of the growth from 2008 to 2009 when spending per patient rose by13%.  Over those two years, spending on physicians and other professional services jumped by 21 percent. 

Insurers’ outlays rose in part because patients were using more services, but the report notes, “higher prices explained 77 percent of the growth in spending from 2007 to 2008, and 88 percent of the increase from 2008 to 2009.” (Critics who believe that Obamacare will lead to increased use of medical services that we simply can’t afford should take note.   In Massachusetts, increased utilization has not been the major factor driving  health care inflation.)

          Legislators Send a Warning to Providers Who “Abuse Their Market Power”

Responding to levitating costs, last month Massachusetts became the first state in the nation to pass legislation that aims to cap overall healthcare spending so that it grows no faster than the state’s economy. The target for 2013 is just 3.6 percent. (Nationwide, economists are predicting annual increases of 6.5% over the next few years. ) 

The law also creates an independent Health Policy Commission that is charged with monitoring provider organizations with revenues of $25 million or more. If they are exceeding the targets they will be required to “submit plans for corrective action.” More importantly, the Commission may refer cases to the attorney general if commissioners determine that an organization “has abused its market power.”  The Commission will not be funded by the state legislature, protecting it from the wrath of lobbyists.

But the new law did not go nearly as far as many wished. In 2011 Massachusetts’ House Majority Leader introduced legislation that divided the state into four geographic regions and would have limited provider payment rates to the eightieth percentile of current rates in each region.In other words,p roviders on the top step of a five-step reimbursement ladder would have had to accept lower payments. ( Though do doubt some adjustments would have been made for teaching hospitals they do have extra costs.)  No surprise, the  Majority Leader’s idea never made it into the legislation passed in August.

.A House proposal for a “luxury tax” on high-cost providers that was supported by the  governor and the Attorney General also was not included in the final bill. Clearly, politicians are not eager to grab what Nancy Turnbull has called “the third rail of reform.”

Nevertheless,  last month, the state’s final report on rising health care costs acknowledged that these proposals “illustrate the tension between providers receiving higher payments and those receiving much less for similar services. . .  this issue has clearly not been laid to rest.”

On HealthAffairs.com, Turnbull offers what I view as the best summary of the bill Massachusetts passed last month: “After a two-year gestation period for its payment reform and cost control bill, the Massachusetts legislature finally delivered…an exoskeleton. Time will tell whether the law will be transformed . . . into an effective cost control creature with strong and vital organ systems. Some of the essential DNA is there but the challenges ahead are formidable. However, regardless of whether Massachusetts is ultimately successful at ‘cracking the code’ on cost control, as Governor Deval Patrick and others hope, the state is going to learn a lot over the next few years, much of which will no doubt be useful to other states.”                                               

                                           Los Angeles

Massachusetts may be leading health care reform, but when it comes to doing something about unwarranted disparities in fees, Los Angeles has gotten a jump on Boston. Last week, L.A. began sending letters to citiy employees telling them that doctors affiliated with two of the city’s marquee hospital–Cedars-Sinai and UCLA— will no longer be covered under Anthem’s Select health plans, effective Jan. 1. 

 About 27,000 city workers and their families are enrolled in Anthem. An additional 32,000 city employees and family members who are insured by Kaiser Permanente will not be affected, and most Los Angeles police officers, firefighters and retirees are covered by separate contracts. (It’s worth noting that although Cedars-Sinai and UCLA are viewed as “hospitals to the stars,” neither appeared on the Joint Commission’s list of “Top Perfomer’s” list. By contrast, Kaiser Permanente in Los Angeles did make the cut, along with many other Kaiser medical centers in California. )

The move will save $7.6 million in annual premiums. Officials at Cedars-Sinai and UCLA protested, arguing that their higher prices are warranted because they do world-class medical research and offer  cutting-edge treatments in areas such asr cancer or organ transplants that benefit the entire community.

But too often, brand-name hospitals charge Gold Coast rates for low-tech procedures such as low-risk vaginal deliveries “Purchasers are sending a signal that certain prices are just unaffordable,” David Lansky, chief executive of the Pacific Business Group on Health, which represents large companies such as  Walt Disney Co.  told the Los Angeles Times.  “We want great teaching and medical research institutions to survive. Whether that should happen by charging everyone in society a higher rate for routine services is more debatable.” [m]y emphasis

The L.A. Times story ends  by asking whether city employees will “raise Cain” over losing their doctors.  In the near future, I will be writing about solutions that patients might find more palatable While some call for a “single-payer” system, others endorse “all payer” systems that have worked well, both in Maryland and in Germany.

 

17 thoughts on ““The Third Rail of Payment Reform”–Tackling Wide Variations in How Much Providers Charge

  1. Maggie:

    Interesting post. I just received my bill for the initial Friday night visit to the ER where they misdiagnosed my condition as Gastritis instead of a blocked Bile Duct. They sent me home after administering drug to control nausea and told me to eat a bland diet which I was already doing due to acid refux. My 7PM dinner that night was 1/2 a helping of sphaghetti and a meatball. $1300 for that visit. Bilirubin was elevated.

    I am going to ask for an itemized bill, talk to my insurance, and challenge the hospital on it. On Monday after sleeping much of Saturday and Sunday and eating bread, I was back to the ER with a similar attack. This time they kept me as the Bilirubin was elevated (higher) and I was in extraordinary pain. This time they did an MRI.

  2. Run —

    First, I’m very sorry to hear that you’ve been in extreme pain.

    Getting sick over a week-end is always at best, a hassle, at worst , means that you won’t be able to find the care you desperately need.

    But on Monday, I’m wondering why you went back to the ER,
    If you don’t have a primary care doctor who you like and trust, I would urge you to check on finding a federally qualfied Community Clinic. Under the ACA they’re expanding (not as much as orignally hoped, but they’re expanding.)
    Most are open very early and stay open late.

    They’re staffed by nurse practioners and a self-selecting group of doctors who choose to work in these neighborhood centers.
    In NYC they are very good.
    When my daughter graudated from college, she began getting her health carea at a Community Center. Shd continued to use them for 5 or 6 years until she married, became pregnant and switched over to an obstetric practice that included nurse midwives.
    The nurse midwives deliver her baby and in turn lead her to a great pediatric practice with pediatric nurse practioners.

    Run, 74551–we have been corresponding for a long time, and II don’t like to think of you going to an ER for your care.
    Most ER docs are GREAT, but they can’t give you the continuity of care that you need.
    These clinics will give you continuity of care. Unlike your ER, they will know what happened the last time you came in, what was done, what didn’t work.
    Please let me know if you find a (federally qualified) community health center anywhere near where you live.

  3. The situations discussed in this article have not gone unnoticed. If you do what I do, sell health insurance and often review and assist with claims, it is perfectly obvious what hospitals and large group practices are doing, even so called NFPs: they’re paying administrators a small fortune, giving signing bonuses to recruited specialists as if they were sports stars, overcharging consumers whenever they can get away with it, and allowing ER physicians and radiologists, etc. to send huge bills to unsuspecting patients who thought, because they were using an in-network hospital or facility, that the physician provided services would be in-network as well.

    Believe me, we’ve noticed but we’re nearly powerless to do much but hopefully intervene and remind providers of regulations, their contractual obligations, and sometimes, simply that someone is watching what they’re doing. But it’s a tightrope – we don’t want to undermine the consumer’s trust in the provider/facility or sully that relationship in any way. At the same time, we do what’s right and expect the same from other professionals. The consumer certainly has a right to expect as much!

  4. Camille–

    Thank you for your comment. Everything you say is corroborated by research, investigative reporting (like the series in the North Carolina paper), and what doctors tell me–usually off the record.

    Under reform, Medicare will be scrutinizing hospitals in areas where we know there are abuses. And if Medicare steps forward, I’m sure private insurers will follow. But as you say, right now they don’t have that much power. They need Medicare to provide political “cover.”

    Non-profit hospitals also have to worry that if they are paying administrators and specialists as if they were sports stars, people will be questioning their tax-exempt state unless they can clearly show that they are helping the communtiy . . .

    Finally, something definitely needs to be done about doctors who are not part of the network treating patients in network hospitals–and then billing the patient separately.

    As more hospitals become accountable care organizations I don’t think that will happen– but I’m not sure.

  5. run,

    Sorry about your biliary problem and hope it is now much improved. Why would they ignore an elevated bilirubin? A missed diagnosis like that could have had a significantly worse outcome.

    Camille, I appreciate your candid comments. I’m not sure why the situations you describe are not guided by stricter laws and scrutiny. I’m not sure I feel comfortable that some insurers will turn a blind eye, in order to preserve the consumer’s ‘trust’. Is the consumer then not doubly deceived? If you are doing what is ‘right’, why not try and stop what is being observed?

  6. Ruth–

    I udnerstand what you are saying when you suggest that patients are “doubly decived.,”

    But I’m afraid that insurers will turn a blind eye to
    proividers’ overbilling because, as the North Carolina
    reporters point out: “Hopsitals are easy to love. Insurers are not.”
    If an insurer suggests that a highly-regarded hospital is
    over-billing, most patients will just assume that the insurer is
    trying to save money in ways that will lower the quality of
    care.
    Also, an insurer that begins to publicly question what a hospital is doing is likely to lose its contract with the’
    brand-name provider that it needs in its network.

  7. Maggie,
    Thanks for that clarification. I went into denial for a few minutes. These preferred, preferred providers thus trump big insurance, yet it’s often a combined effort!
    >>>>>If an insurer suggests that a highly-regarded hospital is over-billing, most patients will just assume that the insurer is trying to save money in ways that will lower the quality of
    care.

    Sounds like capitulation to a vast abuse of our most priceless asset. How sad….

    R

  8. Hi there,

    Love the opening lines of this post: Why do some hospitals and doctors charge far more than others for exactly the same routine procedure?

    “Because they can; it’s not any more sophisticated than that,”

    There is an old joke that has the same answer to a different question: ‘What does a dog lick its genitals?’

    Sorry if that’s too risque but I am a Provocative Therapist after all.

  9. I believe that California has laws to limit the extent of balance billing in hospitals. This would protect any patient from being hit with huge, undisclosed, unstoppable charges from out of network price-gougers,

    California also has a wonderful law called AB 774, which limits hospital charges to any uninsured person to bascially the Medicare fee schedule. (if the patient has family income less than 350% of poverty.) MN, IL, CT and NY have similar laws

    We also need ‘Health Courts’ where price gouging can be challenged, and where administrative judges have the authority to reduce overcharges.

    Bob Hertz, The Health Care Crusade

  10. Maggie:

    We have communicated for years now and normally I would have gone to my typical doctor if he was in the office.

    I am a part of the U of M Healthcare Clinic and the hospital, which I sometime like and dislike depending on which part I am using. If you remember, I used to work in upstate NY southeast of Syracuse or 9 hours from Ann Arbor. I now work 1 hour northeast of Columbus and 1 hour south of Cleveland. I am 3 hours to Ann Arbor instead of 9 hours from NY. There was no other place to go and in my condition (felt like I swallowed a beach ball), I was not going to drive to either Columbus or Cleveland and was too far from home.

    I have the hospital report and the remarks from the examining surgeon who felt the ER Doc was a tad off in his diagnosis. Once I was admitted, the care was ok. Two procedures later and I was far better and less yellow. Only one community care center in town.

  11. Run 75411,

    I’m very, very happy to hear that you’re feeling better.

    I also realize that federally qualified medical centers are not equally available in all parts of the country. (As you probably recall, (I grew up close to where you now live.)

  12. Bob–

    It strikes me that, in many ways, when it comes to health care reform, California is ahead of the rest of the country. (For example, it recently added “acupuncture” to the list of
    “essential benefits” that insurers welling policies in the Exchange will have to offer.)

    Health Courts sound like an excellent idea. But they would have to pay for themselves–i.e. they would need to save enough money in over-billing to over the cost of the courts.

    I suspect that they could do this.

  13. Bil;–

    I’m glad that you’re much better.

    Didn’t realize that you were no longer working in New York State–though perhaps you wouldn’t have found a community health center close to where you were in N.Y. either.
    We need more of these CHC’s (and under reform they will be coming.) By and large, they will be a good alternative to ERs that are over-crowded and don’t know the patient. (A CHC will have your records.)
    .

    • Maggie:

      Thank you. Doctors do make mistakes. What got me most was the ER. They triaged me at level 3 and pain was a level 2 to which I rated mine at 10 on a 10/10 scale. My letter is still in preparation.

      I can not wait for bundling of bills and hospitals having to explain dbl admissions.

  14. Maggie,

    You really need to learn to separate hospital charges from doctor charges. I can assure you that NO insurance company pays a doctor $6000 for a vaginal delivery. Those are HOSPITAL CHARGES, not doctors’ fees. The list below is the reimbursements that doctors in Cleveland Ohio get from different insurers for a vaginal delivery:

    BC/BS: $172
    Aetna: $201
    Humana: $189
    Medicare: $149
    Medicaid: $101