New hospital data shows giant swings in prices between cities, states
WASHINGTON (WCIV/AP) - Hospitals within the same city sometimes charge tens of thousands of dollars more for the same procedures, according to figures the government released for the first time Wednesday.
The federal list sheds new light on the mystery of just how high a hospital bill might go - and whether it's cheaper to get the care somewhere else.
There are vast disparities nationally. The average charges for joint replacement range from about $5,300 at an Ada, Okla., hospital to $223,000 in Monterey Park, Calif.
It's not just national or even regional geography. Hospitals within the same city also vary wildly. In Jackson, Miss., average inpatient charges for services that may be provided to treat heart failure range from $9,000 to $51,000, the Department of Health and Human Services said.
In Charleston, those same services range from $9,400 to nearly $53,000, according to the data released Wednesday. To see records from all of Charleston's area hospitals on the 100 most common inpatient procedures, click here.
Hospitals usually receive less money than they charge, however. Their charges are akin to a car dealership's "list price." Most patients won't be hit with these bills, because they are paid by private insurance, Medicare or Medicaid. The government and insurance companies routinely negotiate lower payments with hospitals.
"These charges really don't have a direct relationship with the price for the average person," said Chapin White of the nonprofit Center for Studying Health System Change. "I think the point is to shame hospitals."
But the charges do show up on the bills of people without medical coverage, many of whom try to negotiate smaller fees for themselves. And they could affect people paying for care that is outside their insurance company's network. Hospitals say they frequently give the uninsured discounts.
Some people still pay full price, or try to, because they don't know they can bargain for a discount, White said.
For them, "this is the opening bid in the hospital's attempt to get as much money as possible out of you," he said.
"Everyone should care insured or not"
"That's a great disparity," Robin Giangrande noted as she read through the published list of hospital medical procedures costs Thursday.
Giangrande works for RG Advocates, a medical bill solutions company. She says the study, released by the study Centers for Medicare and Medicaid Services shows the major differences in medical charges.
"You need to care because it's those increased amounts that your insurance company is paying that makes your premiums go up and that makes your employer have to pay more," she said.
This information about hospital costs should raise red flags for a number of reasons she said.
For example, if you go to the hospital for chest pain at Trident Medical Center, the report indicates the charge will be more than $19,000. At Roper Hospital, the charge would be more than $16,000, where as MUSC it would about $10,000.
Giangrande says people commonly have misconceptions about these charges.
"In a lot of consumer situations a lot people will think the more someone charges they are getting something better. That if I go to the high price place I'm going to get better service. With healthcare that is really not a correlation you can make."
The department released a list of the average charges at 3,300 hospitals for each of the 100 most common Medicare inpatient services. The prices, from 2011, represent about 60 percent of Medicare inpatient cases.
The Obama administration says consumers and businesses can use the information to make better choices and pressure hospitals to set reasonable prices. Hospital charges are typically confusing and unpredictable.
"Currently, consumers don't know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city," said Health and Human Services Secretary Kathleen Sebelius. The list will help fill that gap, she said.
The department also is making $87 million in federal money available as grants to states to improve their hospital rate review programs and get more information about health care charges to patients.
According to an HHS release, the data centers are designed to help consumers the price comparisons in different areas. The hope is, according to HHS, to let businesses and consumers to make smarter decisions about their health in a cost-effective way.
The department went on to say that the Affordable Care Act, commonly called Obamacare, has several tools that can help consumers find the best value in healthcare.
"Medicare is beginning to pay providers based on the quality they provide rather than just the quantity of services they furnish by implementing new programs such as value-based purchasing and readmissions reductions," the department said in a statement.
HHS awarded $170 million to states to enhance their rate review programs, and since the passage of the Affordable Care Act, the proportion of insurance company requests for double-digit rate increases fell from 75 percent in 2010 to 14 percent so far in 2013.
To view the new hospital dataset, please go to: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html.
For more information on HHS efforts to build a health care system that will ensure quality care, please see the fact sheet "Lower Costs, Better Care: Reforming Our Health Care Delivery System," at http://www.cms.gov/apps/media/press/factsheet.asp?Counter=4550.
To read a fact sheet about the Medicare data showing variation in hospital charges, please see: http://www.cms.gov/apps/media/fact_sheets.asp.