(Bloomberg) — U.S. hospitals charge prices that, at times, can be thousands of dollars different for the same medical procedures, even within towns or states, according to federal data released today.
In some cases, the data from more than 3,000 hospitals that take Medicare, the health program for the elderly, showed that costs can be drastically different at hospitals just miles apart. For instance, three hospitals located in and around the Denver suburb of Aurora, Colorado, alternately charged $97,214, $46,457 and $28,237 to treat a respiratory infection with complications, according to the report.
The U.S. Centers for Medicare and Medicaid Services says it released the data for the first time to help make the system “more affordable and accountable.” The information adds to the scrutiny of health-care costs and what patients, health insurers and the government pay for medical services as the Affordable Care Act, which aims to provide health coverage for 27 million uninsured Americans, takes effect.
“Hospital pricing is the craziest of crazy quilts,” says Ron Pollack, executive director of Families USA, a Washington health consumer advocacy group. “Most absurdly, the people who wind up paying the highest prices are people who are uninsured and who can least afford bearing this unaffordable burden.”
Significant variation
The hospitals located in and around Aurora were paid a fraction of what was charged for the treatment, according to the data. Pollack says the only people who face the full charges are those who aren’t represented by the government or a private insurer, such as UnitedHealth Group Inc., the nation’s largest for-profit health plan.
“As we expand health coverage for people, it’s even more important to have a serious agenda that brings together the twin concerns of quality of care and cost efficiency,” Pollack says.
The agency released the prices for the top 100 most frequently billed in-patient services at hospitals, such as pacemaker implantations, which it said comprise 60% of Medicare billings.
The data show the discrepancies run nationwide.
In New York City, the treatment of a hip or pelvis fracture without complications varies widely as well. At Lenox Hill Hospital in Manhattan, care under that billing code costs, on average, $38,588. Fifteen miles away, the procedure at Coney Island Hospital in Brooklyn was priced at $13,137 on average, or about a third less.
Long known
Researchers have long known that hospital costs vary even at places just a few miles apart. The Dartmouth Atlas of Health Care has studied the issue of varying medical costs for more than 20 years. It’s the first time, however, that the wholesale data has been made available to the public at large.
The new data were released as the federal government and states are ramping up to open insurance exchanges beginning on Oct. 1 that will offer insurance to the uninsured, in some cases with federal incentives to help pay for it. About 40% of the 26 million people expected to gain insurance under the ACA are expected to be covered by Medicaid, the U.S plan for the poor and disabled.
Republicans have faulted the law for not doing enough to tame rising health costs in the U.S. even as the growth slowed to about 3% a year from 2009 to 2011.
