News Photo by Crystal Nelson Friends Together founder and Executive Director Judy Burns on March 1 works in her office. The nonprofit helps cancer patients during or after their diagnosis.

ALPENA — New federal requirements make it possible for patients to see what an upcoming hospital procedure might cost, but Alpena hospital officials say determining actual costs is more complex than that.

For example, MidMichigan Medical Center-Alpena’s flat rate for removal of an appendix is $19,432, according to the hospital’s standard charges posted online recently to meet the new federal transparency mandates.

But the cost of that appendectomy could vary depending on their insurance carrier and plan, whether the hospital has granted a discount based on the patient’s income, or if the patient pays for the procedure with cash.

For the same appendectomy, the Alpena hospital charges $17,045 to Blue Cross Blue Shield, $12,242 to Priority Health’s Preferred Provider Organization (PPO) plan, and $16,517 to United Healthcare. A consumer paying with cash would pay $11,659.

Complications during surgery can further change the price, depending on the severity of those complications.

And the costs patients can see online do not reflect what a patient will be billed, said Chuck Sherwin, president of the Alpena hospital.

In addition to the terms of his or her insurance plan that set how much the carrier will cover and the patient’s copays and deductibles, a patient’s bill might also include charges for doctor’s appointments, diagnostic tests, and medicines, Sherwin said.

And online price estimators can be difficult to use, procedures can be hard to search for because the name of the same procedure can vary from hospital to hospital.

Still, Sherwin said the pricing transparency is a good thing.

“It’s not meant to be complicated, it’s just become complicated,” Sherwin said. “And, as the federal government continues to try to drive down the cost of health care, they are now mandating things to help patients navigate those processes.”

‘RIGHT THE MARKET’

Hospitals had until Jan. 1 to post the costs of services online — a move that the U.S. Centers for Medicare and Medicaid Services says will make it easier for consumers to compare costs across hospitals and estimate the cost of care before going to the hospital.

Jeffrey Kullgren, a University of Michigan professor who specializes in health care policy, said to imagine going to a restaurant and ordering from the menu without knowing what the meal will cost.

That’s what health care was like before the new rules, he said.

“What we’re talking about is making health care a little bit … more like other consumer products,” Kullgren said. “So, it’s a really good thing for people who are having to pay for care out of their pockets, and especially for those who are struggling to make ends meet in our current economy.”

Kullgren said the cost of a service as simple as a blood draw can vary dramatically, inexplicably, depending on what health care organizations negotiated with insurers. He said consumers have a right to know what those prices are.

Kullgren said he’s interested to learn what will happen to health care costs now that prices have become transparent.

“I think there is a hope that making that information more transparent will allow prices to come down and right the market,” he said. “One hope is that the market will respond and people will vote with their feet” by choosing a lower-cost hospital or insurance provider, as they do with other products.

‘DOUBLE-EDGED SWORD’

Judy Burns, founder and executive director of Friends Together, a nonprofit that helps people during and after a cancer diagnosis, said she likes the new rules, but worries they could be “a double-edged sword,” because some patients could be hesitant to start treatment if they think it’s unaffordable.

“If they were to see an overwhelming amount of money and are not sure if they’re covered under their plan, it might make them hesitate,” she said. “I can see that happening with some people. They’ll look at that and say, ‘I can’t get treatment; I can’t afford that,’ without knowing how they might be able to have it paid for through insurance or (a) leukemia foundation or some other foundation that might help people who are in real need.”

Burns said the only way for a patient to know the cost of treatment for sure is to work with his or her medical team and insurance company.

While Sherwin, the Alpena hospital president, said the new regulations are a starting point, he believes the cost of a procedure is only one piece of the overall picture.

You get what you pay for, for example.

“If all we do is say to people, ‘We’re going to send you the lowest cost provider,’ I think the quality of health care goes down,” he said. “So, it’s not just about price, it’s also about the level of service that you’ll get, and the cost.”