Hospital Charges Exposed & Vary Widely

May 10, 2013

New data shows significant variation across the country and within communities in what hospitals charge for common inpatient services.  Also, HHS made approximately $87 million available to states to enhance their rate review programs and further health care pricing transparency. 

“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,” HHS Secretary Sebelius said. “This data and new data centers will help fill that gap.”

The data posted May 8th on CMS’s website include information comparing the charges for services that may be provided during the 100 most common Medicare inpatient stays.  Hospitals determine what they will charge for items and services provided to patients and these “charges” are the amount the hospital generally bills for an item or service.

"Transformation of the health care delivery system cannot occur without greater price transparency," said Risa Lavizzo-Mourey, M.D., RWJF president and CEO. "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."

These amounts can vary widely.  For example, 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, Okla., to a high of $223,000 at a hospital in Monterey Park, Calif. Even within the same geographic area, hospital charges for similar services can vary significantly. For example, average inpatient hospital charges for services that may be provided to treat heart failure range from a low of $21,000 to a high of $46,000 in Denver, Colo., and from a low of $9,000 to a high of $51,000 in Jackson, Miss.

To make this data useful to consumers, HHS is also providing funding  to data centers to collect, analyze, and publish health pricing and medical claims reimbursement data.  The data centers’ work helps consumers better understand the comparative price of procedures in a given region or for a specific health insurer or service setting. Businesses and consumers alike can use these data to drive decision-making and reward cost-effective provision of care.

Source: US Health & Human Services, News Release – May 8, 2013, read more at “Administration offers consumers an unprecedented look at hospital charges”

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