IV Costs are High for No Explainable Reason

Posted in IV Products by Chris Wiltz on September 3, 2013

mddi-header-logo1White Plains Hospital in White Plains, NY pays 86 cents for a unit IV of saline solution from Hospira. How then did a patient with private insurance (Aetna) end up paying $91 for it?

If you go by a recent New York Times piece, “How to Charge $546 for Six Liters of Saltwater,” the answer is apparently no reason at all.

The latest in a Times ongoing series examining, and attempting to explain, the often exorbitant costs of healthcare in the United States, the article uses a 2012 outbreak of food poisoning in upstate New York as a means of examining the disproportionate costs of an IV. Though the people affected by the outbreak covered all levels of income and insurance, the pricing when it came to an IV has no rhyme or reason to it. The only common thread is that patients were billed at a rate many factors more than the cost to the hospital.

While the Medicare limit for one liter of normal saline is at $1.07 this year the author states:

But even before the finished product is sold by the case or the truckload, the real cost of a bag of normal saline, like the true cost of medical supplies from gauze to heart implants, disappears into an opaque realm of byzantine contracts, confidential rebates and fees that would be considered illegal kickbacks in many other industries.
The culprits would seem to be group purchasing organizations that negotiate prices for IVs and other devices in ways that are, at best secret, and, at worst, draconian and motivated entirely by profit. However, it would seem that insurance companies, and even the federal government, should also shoulder some of the blame. In the food poisoning case the author finds instances of not only inconsistent billing but also instances where Medicaid patients were billed when they should not have been. A spokeswoman for White Plain Hospital says the markup involves related services such as procurement, biomedical handling, and storage. Any thinking human would have to question what is it exactly about saline solution (essentially saltwater) that makes it so expensive to store and handle.

Ulimately the author is left with no real conclusions even after petitioning the New York State Department of Health for assistance in the food poisoning outbreak:

Last fall, I appealed to the New York State Department of Health for help in mapping the charges for rehydrating patients in the food poisoning episode. Deploying software normally used to detect Medicaid fraud, a team compiled a chart of what Medicaid and Medicare were billed in six of the cases.

But the department has yet to release the chart. It is under indefinite review, Bill Schwarz, a department spokesman, said, “to ensure confidential information is not compromised.”

Read the full NYTimes article here. Where are these costs coming from? And what’s to blame?Weigh in in our comments section.
Media Contact:
Chris Wiltz
MD+DI
Email: Christopher.Wiltz@ubm.com
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