Issue: June 2013
Perspective from Jack M. Bert, MD
May 09, 2013
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Report outlines ‘vast variations’ in hospital costs

Issue: June 2013
Perspective from Jack M. Bert, MD
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The amount charged by hospitals for inpatient services varies significantly based on region, and large disparities even exist within individual communities, according to a report released this week by the federal government.

“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,” Kathleen Sebelius, secretary of the Department of Health and Human Services, said in a press release. “This data … will help fill that gap.”

The data — available on the CMS website, cms.gov — compares costs for services associated with the 100 most common Medicare inpatient stays.

The extent of the cost disparities vary widely based on the nature of the procedure.

For example, the average total charge for the treatment of red blood cell disorders without major comorbid conditions or complications ranged from $3,534 at W.W. Hastings Indian Hospital in Tahlequah, Okla., to $166,363 at Seton Medical Center in Daly City, Calif.

The average total charge for the treatment of red blood cell disorders with major comorbid conditions or complications ranged from $6,501 at Mercy Medical Center in Baltimore to $141,751 at Martin Memorial Medical Center in Stuart, Fla.

The average total charge for pulmonary embolism without major complications ranged from $6,107 at Wooster Community Hospital in Canton, Ohio, to $129,078 at Northbay Medical Center in Fairfield, Calif.

The average total charge for a joint replacement procedure without major complications range from $5,300 at a hospital in Ada, Okla., to $223,000 at a hospital in Monterey Park, Calif.

In addition to releasing the data, the Health and Human Services Department made approximately $87 million available to states to be used for the promotion of increased transparency in health care costs. The department also is funding data centers that collect, analyze and publish information on health care costs and reimbursement.

The Robert Wood Johnson Foundation pledged to help disseminate the data.

“Transformation of the health care delivery system cannot occur without greater price transparency,” Risa Lavizzo-Mourey, MD, president and CEO of the Foundation, said in a press release. “While more work lies ahead, the release of these hospital price data will allow us to shine a light on the often vast variations in hospital charges.”

For more information:

The report is available online at www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html