HealthGrades (HGRD)

[Golden Cross]

HealthGrades Launches Nation's First Medical-Care Cost Reports to Help Consumers Shop for Healthcare
Monday March 20, 7:30 am ET
"List Price" and Health Plan Rates Available for Consumers on HealthGrades.com, and in Product Suite for Large Employers


GOLDEN, Colo.--(BUSINESS WIRE)--March 20, 2006--"List Price" of Childbirth in Northeast Nearly Twice
Price in the West, HealthGrades Analysis Shows

For the first time, consumers can obtain pricing information for more than 55 hospital-based procedures across the country with the new HealthGrades Medical-Care Cost Reports launched today at the Web site of HealthGrades, the leading healthcare ratings company. Together with HealthGrades' hospital-quality ratings and physician-quality reports, consumers can now shop for healthcare providers utilizing both quality and cost information at one Web site: www.HealthGrades.com.

The Medical-Care Cost Reports contain, among other information, three dollar amounts for an entire episode of care:

List Price: The average amount charged by the provider of care;
Health Plan Portion: The amount negotiated, on average, by health plans. Nationally, this is approximately 45% of the list price amount, however, this varies by region from 39% in the Northeast to 58% in the West; and
Out-of-Pocket Fee: For individuals with insurance, this is the average portion that they would pay.
"While President Bush and the new consumer-directed health plans are asking consumers to shop around for the best healthcare value, surveys show that the majority of people have no idea what the cost of a medical procedure is until the bill arrives," said Kerry Hicks, HealthGrades' CEO. "Now for the first time, HealthGrades will help individuals approach the healthcare system as value-conscious consumers, armed with pricing information along with quality ratings, so that they can make smarter choices."

The Medical-Care Cost Reports provide detailed charges, health plan payments and out-of-pocket cost information on the entire episode of care for more than 55 procedures, ranging from baby deliveries to bypass surgeries. The information for each episode of care includes hospital fees as well as outpatient, physician, laboratory and drug fees, both individually and combined. Each report, customized by region, age and gender, is designed to help individuals plan for their care, understand their potential financial liabilities, and shop for the best price.

In general, the average list price of procedures is the lowest in the West and the highest in the South. For example, gastric-bypass surgery has a list price of $35,600 in the West, compared with $59,500 in the South. Another example is that the average list price for the delivery of a baby, without complications, is $6,700 in Western states, compared with $12,400 in the Northeast. Overall, prices (list price or charge) in the South are 11 percent higher than the average, and 43 percent higher than the least-expensive region, the West. List prices are typically paid only by those without insurance coverage; health plans negotiate lower rates with providers of care, such as hospitals and physicians.

The average amounts negotiated by health plans are on average the lowest in the Northeast and highest in the Midwest. Average out-of-pocket fees (paid by insured patients) also vary widely by region. They are highest in the West, most likely due to the strong influence of managed care in this region, and lowest in the Northeast. As an example, the average out-of-pocket amount in the West is almost double what it is in the Northeast.

The variation in fees is even greater for some specific procedures. Actual out-of-pocket costs for the consumer with insurance vary widely as well, with procedures in the Northeast 49 percent lower, on average, than in the West. One stark example of this variation is the out-of-pocket costs for defibrillator implants: In the Northeast, the average out-of-pocket cost for the procedure and its related elements is $2,100; in the Midwest, it is $9,200.

HealthGrades' Medical-Care Cost Reports are being offered at HealthGrades.com for $7.95 each. HealthGrades' hospital ratings of 28 procedures and diagnoses at each of the nation's more than 5,000 nonfederal hospitals remain free on the Web site. In-depth hospital, physician or nursing-home reports are also available at the Web site for a fee.

"For anyone figuring out their FSA, HSA, or HRA contributions, planning for a hospitalization, or negotiating the costs of an upcoming procedure, HealthGrades' Medical-Care Cost Reports provide valuable information that has not been available before," continued Mr. Hicks. "The new era of consumer-driven healthcare is here, and HealthGrades will continue to offer easy-to-use information to help consumers, employers and health plans adapt and thrive in this new environment."

The HealthGrades Medical-Care Cost Reports are based on information from more than 55 million unique individuals covered by more than 80 health plans, reflecting actual prices of episodes of care as well as actual out-of-pocket costs for health plan members.

Subscription-based access to the HealthGrades' Medical-Care Cost Reports are also being added to the Quality Ratings Suite, HealthGrades online application for large employers, benefits consultants and health plans. The Quality Ratings Suite provides healthcare ratings, cost calculators, comparison tools and interactive healthcare guides to help employees and members obtain better healthcare.

More than 2.5 million individuals visit HealthGrades.com each month to research the quality of local hospitals, doctors and nursing homes. That number has nearly doubled in the last year, a trend the company attributes, in part, to the rise of consumer-directed health plans. In addition, the number of large companies providing HealthGrades' healthcare ratings and cost information directly to their employees, through HealthGrades' Quality Ratings Suite continues to grow, and now includes 75 of the Fortune 500.

About HealthGrades

Health Grades, Inc. (Nasdaq:HGRD - News) is the leading healthcare ratings organization, providing ratings and profiles of hospitals, nursing homes and physicians to consumers, corporations, health plans and hospitals. Millions of consumers and hundreds of the nation's largest employers, health plans and hospitals rely on HealthGrades' independent ratings and decision-support resources to make healthcare decisions based on the quality of care. More information on the company can be found at http://www.healthgrades.com.



Contact:
Health Grades, Inc.
Scott Shapiro, 720-963-6584
[e-mail]

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