Unveiling Price Disparities: Exploring Inpatient Hematuria Evaluation Costs in Rural For-Profit Hospitals - Ian Berger

May 19, 2023

Ruchika Talwar and Ian Berger discuss a Urology Practice publication on inpatient hematuria evaluation costs in rural for-profit hospitals. Berger reveals that rural for-profit hospitals' costs are significantly higher than their non-profit counterparts, with a price increase of up to 80% for intermediate-risk and about 60% for high-risk evaluations. He attributes this disparity to the lack of competition in rural areas, allowing for-profit hospitals to negotiate higher rates. Berger suggests that physicians should inform patients about the availability of pricing data, emphasizing the need for transparency to reduce financial toxicity. Both agree that more research is required to understand and address price disparities in rural urologic care.


Ian Berger, MD, MSHP, PGY4, Urology Residency Program, Duke University Hospital, Durham, NC

Ruchika Talwar, MD, Urologic Oncology Fellow, Department of Urology, Vanderbilt University Medical Center, Nashville, TN

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Ruchika Talwar: Hi everyone. Welcome today to our Health Policy Center of Excellence. My name is Ruchika Talwar, and as usual, I'll be spotlighting some interesting new health policy articles that have been put out in our field. I have with us Ian Berger, who's a PGY-4 at Duke University Hospital. Thanks Dr. Berger for joining us today.

Ian Berger: Thanks for having me. I'm excited to talk about our work.

Ruchika Talwar: So you published this really interesting paper recently in Urology Practice entitled Association of Rural Hospital for-profit Status With Higher Publicly Reported Prices for the Components of Inpatient Hematuria Evaluation Among Commercially Insured Patients. Quite a mouthful, but I think you tackle a really important topic here. We're going to talk a little bit about price transparency, as well as variations and differences in prices for the same services. So Ian, tell me what were the specific aims of this study and what data set were you using?

Ian Berger: So the aims of the study was, number one, to compare price transparency across the country and see how it was for a common urologic condition, and we chose microscopic hematuria for that condition. The second aim was to actually look at the prices and see how they compare both across rural and metropolitan populations, but also not-for-profit and for-profit hospitals. We used the Turquoise Price database, which is a third party database that partners with both consumers and hospitals. On the hospital side, it partners by bringing them up to date with the CMS mandate and actually publishing the prices in a way that consumers can use. And from the consumer side, people can actually go on their website and look up the prices and price compare between hospitals.

And so when we actually did that, we found that there were hospitals that stood out in terms of their prices. For the for-profit hospitals, we already knew that they had higher prices, but specifically we found that the rural for-profit hospitals were actually driving the price increase for the for-profit hospitals.

Ruchika Talwar: That's really interesting. Before we take a deep dive, I want to just clarify something. These prices, were they for inpatient services or outpatient services?

Ian Berger: Yeah, so importantly these prices are for inpatient services. We've tried to make that pretty clear in the article. So right now, inpatient services are the only prices that patients can look up within hospitals. Unfortunately, the CMS mandate does not extend to outpatient services. However, not a lot of patients know that and if you are a urologist that's telling a patient you need a cystoscopy and a renal ultrasound to complete your hematuria workup, and as a patient, I'm going online and looking those up, I'm finding the inpatient prices. And so these are really the prices that patients are using to drive their decisions even though they might not actually be the prices right now that they would pay in the outpatient setting.

Ruchika Talwar: Got it. Got it. And presumably you would assume that the differences that you're seeing between hospitals would be proportional for outpatient services too, although that's a big assumption to make I understand. But I think your point is well taken, that these numbers are the ones driving the decisional analysis that patients undertake when they look for this information.

So you mentioned that the rural for-profit hospitals were the major drivers of the price differences that you all saw in this research study. Can you tell me a bit more about that? What was the difference and was it equally different between rural not-for-profit and metropolitan not-for-profit?

Ian Berger: Yeah, so the difference between the two were comparing rural for-profit and rural not-for-profit was about three times more, two or three times. And we looked at both intermediate hematuria, intermediate risk hematuria evaluation, and high risk hematuria evaluation. And the prices differed a little bit, but they were approximately on par. And if you plug them into the regression model that we did, the rural for-profit status alone, so independent of a hospital being rural and independent of a hospital being for-profit, but just the additional rural for-profit status contributed by 80% for intermediate risk and about 60% for high risk in terms of a price increase.

Ruchika Talwar: Yeah, that's really interesting. I wonder, why do you think that is?

Ian Berger: It's interesting. If you think about hospital markets, the rural hospital markets are... Basically one hospital can deliver the care to a entire region. We know that basically 60% of counties in the United States don't have a urologist practicing in those counties. But less than two and a half percent of urologists practice in what we consider rural areas based on the AUA census. And so especially for these rural patients, they might only have one center where they can go to that's in a reasonable distance.

For these rural for-profit hospitals, they're probably better at negotiating those rates with the insurers because for an insurer, there might be a couple insurers in the region that have to go to this single center and rural for-profits can basically say this is what we want for our services. That being said, I wouldn't paint them as necessarily public enemy number one either because the rural for-profit hospitals are delivering necessary care to a rural area and they are supporting maybe emergency care to that area, and they might be using these urology service lines that are typically more profitable to support their margins and be able to deliver the emergency care that they need to the area.

Now it's interesting to compare them to the not-for-profit hospitals in the rural areas because you would think that they practice in a similar setting. There definitely are different areas that for-profits spend their money such as administrative support, also delivering margins to investors. But for the not-for-profits, they might just not do as good of a job as negotiating with the insurers with their prices. Rural hospital closures are a big topic nowadays and it'd be interesting to see how these for-profits are doing compared to not-for-profit hospitals because for-profit hospitals, overall in the United States are increasing about 3% in the last five years.

Ruchika Talwar: Yeah, I think you bring up several really good points that I just want to take apart for a moment. So first of all, these hospitals really do have a monopoly on the market. They're the only ones in town. If they don't provide the services, no one else does. So they do have some leverage with payers. I hear that point. Now, I think you're definitely onto something when you say they may be using these prices to offset the costs of care that are not compensated in other situations. For example, we know that this rural population is definitely more underinsured than other populations, so are they actually getting compensated for these services? It's unclear. And so when they have the ability to get compensated by insurers, then I think that is one way to make up the losses. However, the patient still gets stuck with this bill, so it's definitely concerning.

And I think the distinction between non-profit and for-profit, it's obvious, and you hit that on the head where your expectations for margins are just different. And I wonder if nonprofit hospitals just also get more government support in offsetting some of those uncompensated costs that they deal with as well in treating uninsured or being a safety net hospital or what have you. So a couple of interesting points. However, still we know that variation in cost is not something that we want to strive for in a health system, so what do you think this data can help us do moving forward as physicians and as advocates for our patients?

Ian Berger: Yeah, I think letting your patients know that this data exists out there and that it is accessible to them and that they can look it up. I think that's number one the first step. Certainly as physicians, we want the patients to come back to us. We want them to get the procedure done with us and get the scans done with our health system. I know certainly it makes it easier to counsel them when you're not asking for discs from another institution or an outpatient CT center.

At the same time, we also need to realize that patients are incurring significant costs from the procedures that we've put them through. And I think keeping them in the dark about this information is really unfair to the patient and can eventually lead to poor outcomes down the road. If I'm a patient that's paying a lot to get a hematuria workup, do I have money going down the road to pay for that TURBT that I might need or treat that kidney stone. And so I think we need to put this in perspective of the patient, not just think about ourselves and the profits that we're making for our health system, but also that every test that we order, every decision that we make, does incur a cost on our patients.

Ruchika Talwar: Thanks. Yeah, absolutely correct. And I think the more transparency we have in this space, not just through the fact that hospitals now need to publish this data, but in the analyses that you're doing to get the word out there and ensure that readers of these academic journals are aware of such huge disparities and variations in price and care is definitely going to be helpful as we try to move towards reducing financial toxicity and having these tough conversations with our patients. So I applaud you on your work and I think it's just one of many important analyses that need to be undertaken to kind of better frame the delivery of urologic care in rural areas.

Thanks again for joining us today, Dr. Berger. We really appreciate your time and thanks to all of our viewers here today. We hope you'll join us for our next Health Policy Article Spotlight.