University Hospitals of Cleveland has added organ transplants to the list of procedures for which it offers package prices.
The set rate includes fees for surgeons, pathologists, radiologists, anesthesiologists, hematologists and other medical specialists, as well as hospital and pharmacy fees. The hospital declined to disclose the prices, which vary according to procedure.
The 947-bed academic medical center performs more than 100 transplants a year, including 70 kidneys, 25 to 30 livers and 15 pancreases. It also offers package rates for ophthalmology and plastic surgery. It plans to add heart bypasses to the list.
One of its primary competitors, the Cleveland Clinic, also does package pricing for transplants, and soon all Ohio hospitals that perform non-kidney transplants will, said Allan Gray, senior vice president of the University Hospitals Health System.
Other Cleveland hospitals started packaged pricing for high-volume procedures such as angioplasty in the past year.
Package pricing simplifies the payment process. "They pay us and we simply distribute the proceeds to the various entities by a pre-determined formula," Mr. Gray said.
More important, it shifts risk from payers to providers. That's good for government, private insurers and individuals, who want predictability, Mr. Gray said.
However, in 20% to 25% of cases, the package price will not strictly apply. If costs exceed a certain range, the payer is billed for a small percentage of the excess, Mr. Gray said. If costs are very low, the payer gets money back.