There are many factors contributing to different charges between hospitals. Generally, charges vary because no two patients, conditions, reactions to medications or treatment, physician practices or time of recovery are identical. (See example)

Hospital charges are also impacted by:

• Range of Services Provided
• Intensity of Care
• Emergency Admissions
• New Technology
• Service Frequency
• Amount of Charity Care

Range of service provided

Facilities differ in the range of services they provide to patients. Some may provide the full range of services required for diagnosis and treatment during the stay; others may stabilize patients and then transfer them to another facility for more specialized or rehabilitative care.

Tertiary care hospitals, like Rapid City Regional Hospital, provide a full range of inpatient and outpatient services including trauma care, surgery, mental health, pediatrics, and technically sophisticated services. Tertiary hospitals are where smaller hospitals and specialty hospitals send their patients who need more intensive care. The additional costs associated with tertiary care contribute to the charge structure of the hospital.

Full-service hospitals, which operate 24 hours a day, 365 days a year, have greater costs. Additionally, providing emergency services, air transport, Intensive care units and neonatal intensive care units also increase the overall charge structure.

Intensity of care

Some facilities, like Rapid City Regional Hospital, are equipped to care for more severely ill patients than others. Even though two patients have a similar diagnosis or require a similar procedure, they may, due to their age or other factors, need very different levels of service and staff attention, causing variations in charges.

Emergency Admissions

Hospitals with no emergency services will likely have lower charges. One-third or more of hospital patients come through the emergency room. The costs of emergency services are included in patient charges.

New technology

The equipment facilities use to provide services differs in age, sophistication and frequency of use. Facilities with the latest technology may have higher charges than those with older, less sophisticated equipment.

Impact of seriously ill patients

Patients with the same diagnosis may have complications, more than one disorder or disease occurring at the same time, or other related difficulties and may need very different levels of service and staff attention, causing variation in charges. Hospitals that treat more severely ill patients are expected to have higher case severity ratings, longer lengths of stay, and higher charges.

Charity Care

Hospitals that provide free or discounted care to those who cannot afford care must recover a greater percentage of their operational costs from other services, in order to continue to care for everyone in need. Regional Health provides a Financial Assistance Program for those people who cannot afford necessary medical care.

PRICING

Example

Four patients were admitted for Total Joint Replacement. Due to health of the patients (pre-existing conditions) and the care needed, the charges varied from a low of $25,535 to a high of $64,014.

Patient 1: Total knee replacement procedure due to osteoarthritis, minimally complicated by high blood pressure, decreased thyroid function and sleep disturbances.

Patient 2: Total hip replacement procedure due to fracture. Case complicated by hardening of the arteries, history of open-heart surgery, osteoporosis, low hemoglobin and tobacco use.

Patient 3: Total hip replacement procedure due to osteoarthristis. Case complicated by congestive heart failure, hardening of the arteries, bleeding after surgery, rapid irregular heartbeat, diabetes, high blood pressure, decreased thyroid function, gastric reflux, depression and sleep disturbances.

Patient 4: Total hip replacement due to osteoarthristis. Case complicated by clot in the lungs and in the veins, bleeding after surgery, dehydration, and a decrease in brain function and circulation. Patient required 14 days of hospitalization.

*A hospital that treats more seriously ill patients with co-morbidities (pre-existing health problems) will generally have a higher average charge than a hospital that only treats patients who have fewer co-morbidities. In the example above, the hospital treating all four of these patients average charges would be $39,786,whereas a specialty hospital treating only patients 1 and 2, average charge would only be $27,724.