Surgery Package Pricing Isn’t As Simple as it May Seem

When providers we work with receive a call from us advising a that a prospective patient is interested, they’ll come up with a package price upon our request. It usually takes a day or two to receive their response. The reason is simple. They want to be clear, transparent and fair to all concerned. 

 Maria K Todd, MHA PhD | AskMariaTodd™

We spoke with Maria Todd of AskMariaTodd™, an expert with more than 3 decades of bundled price surgery contracting with employers and workers comp insurers.  Here’s how she explained what’s happening and the challenges faced by healthcare facilities and surgeons:

To calculate a package price for a surgery procedure requires attention to detail, knowledge of the surgery procedure, input from nurses, supply clerks, vendors, and negotiations with independent and/or employed surgeons on their medical staff.  Someone with the authority to calculate and quote prices must consider, among other things:

• the percentage of overheads, materials and supplies, instrumentation;
• incremental costs of nursing and other technical staff time;
• average patient time in the operating room for that particular procedure, time in pre-operative holding area, time in recovery. These three factors require historical analysis of similar and past cases.
• incremental direct costs for medications, implants, and hardware costs along with handling and transportation charges;
• incremental direct costs associated with any x-rays needed during surgery or costs associated with tissue samples that must be examined by a pathologist, and more; and
• if the surgery requires an inpatient admission (where you stay overnight for a few nights at the hospital), they will need to add those costs to the calculation based on past averages associated with that surgery.

Then they must reach out to the surgeon(s) with the privileges, experience and availability and negotiate their fee to add it to the package along with any fees for anesthesia. 

There may be rules and procedures within the facility that must be followed so that the offers to participate in the package are fair and equitable to all eligible staff physicians and surgeons, as medical staff rules don’t allow the facility to steer volumes of procedures to doctors that are not qualified, and they cannot “steer” cases that represent revenue opportunities to healthcare providers by favoritism or otherwise disproportionately. If they don’t do this, they risk losing their accredited status and facing charges of unfair competition from the medical staff, which is an antitrust violation. They could also trigger Federal Antikickback Statute violations if they treat one surgeon differently from the rest. 

If there are 15 surgeons on the staff who are qualified to perform the surgery you want, and you have not indicated a preference, there may be a “round robin” system in place to rotate opportunities to participate by qualified surgeons and anesthesiologists. That’s one of the most popular solutions for case assignment in a multispecialty setting.