New Database Reveals Adjacent Hospitals Charging $200,000 Difference For Same Procedure

Posted: May 8, 2013 in Government, Health, Technology

20130508-203630.jpg A new federal database of hospital prices shows a
massive disparity in medical costs. “Average
inpatient charges for services a hospital may provide
in connection with a joint replacement range from a
low of $5,300 at a hospital in Ada, Oklahoma, to a
high of $223,000 at a hospital in Monterey Park, California. Even within the same geographic area,”
said Secretary of Health and Human Services
Kathleen Sebelius, who spearheaded a new
transparency initiative to reveal traditionally secretive
hospital bills. The Center for Medicare and Medicade Services
released a public spreadsheet for the top 100 most
frequently billed procedures in more than 3,000
hospitals around the country. As compiled by the Washington Post’s Sarah Kliff
and Dan Keating: Ventilator: $115,00 George Washington University vs. $53,000 at Providence (5.4 miles distance) Lower limb replacement: $117,000 at Richmond CJW Medical Center vs. 25,600 at Winchester
Medical Center Pneumonia: $124,051 in Philadelphia vs. $5,093 in Water Valley, Mississippi.
(Note: for more data fun, the Washington Post has a
great (non-embeddable) graphic comparing the
average costs from different states) There is some debate about how much patients,
insurance providers and the government actually end
up paying. “It’s true that Medicare and a lot of private
insurers never pay the full charge,” said assistant
professor at the University of California at San
Francisco Medical School, Renee Hsia, “But you have a lot of private insurance companies where the
consumer pays a portion of the charge. For uninsured
patients, they face the full bill. In that sense, the price
matters.” Another possible explanation of price variation is
quality: some patients might be perfectly willing to
shell out an extra $100K for a better hip replacement.
But, it’s not clear whether that’s the case, because
we don’t have data correlating patient outcomes with
price. The technology startup community has attempted to
generate their own national rankings of medical
quality. Healthtap, for instance, allows patients to
anonymously seek free public medical advice, which
is rated up or down by a community of doctors who
are active on its forums. The more likes a doctor gets, the better he is viewed among his peers. Still much more transparency is needed to accurately
assess the cost vs. benefit ratio. This is one small
step in the right direction. Kudos to Secretary
Sebelius.

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