ST John of God Hospital Bendigo has defended the pricing for hospital stays after a patient's health insurer paid $14,600 for two nights at the hospital.
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The patient had received surgery for bleeding on the back and required post-surgery hospitalisation.
She received notification of the fee a month later. The amount would be the same whether she had stayed one night or seven nights.
Despite being covered by an insurer, the patient said the fee was exorbitant.
"I believe I needed to let others know of this ludicrous situation and we are very thankful we had full cover," she said.
St John of God Hospital on a national level negotiates with health insurers to determine an average cost for each individual type of surgery.
St John of God Hospital Bendigo chief executive officer Darren Rogers said the fees were calculated over the average length of stay, theatre time, anaesthetic and other surgery expenses.
"Health care providers and health funds get together each year to negotiate the case payment," he said.
"I would say $14,000 would be reasonable for the type of surgery from this particular patient.
"Each patient also has an informed financial consent meeting to make sure they understand what they're covered for and what out-of-pocket expenses they may have."
The anaesthetist and surgeon were not included in the $14,600 fee, but the cost was used to cover all other expenses.
Negotiated payments meant hospitals no longer charged per day, and each type of surgery attracted the same fee for insurers.
The cost of some cardiac procedures can be more than $30,000.
Mr Rogers said the system also meant there was an incentive for doctors to avoid keeping patients in beds for too long.
"In going from per diem to case payments, I think most would agree that hospitals are much more aware of not keeping people in beds for longer than is necessary," he said.
"If a patient is re-admitted within seven days, then health insurers do not cover those expenses for hospitals."
The cost had escalated in recent years as the amount of claims with health insurers had increased.
Mr Rogers said because people live longer, the figure was likely to continue to rise.