Wildly Different Hospital Prices Revealed

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The federal government is lifting the curtain on hospital prices — by handing them out as a Microsoft Excel spreadsheet.

Data released this week show prices can vary more than $100,000 for the same procedure. Consider this example in Texas, from The Washington Post:

Las Colinas Medical Center just outside Dallas billed Medicare, on average, $160,832 for lower joint replacements.

Five miles away and on the same street, Baylor Medical Center in Irving, Texas, billed the government an average fee of $42,632.

Of course, we were writing about this several years ago. Now we have a lot more data to show how crazy it can be. (Keep in mind that while the hospitals billed for those amounts, Medicare reimbursed them at a much lower rate.)

Hospitals get away with the price differences, in part, because until now consumers could rarely see and compare them, the Post says. Most health care consumers don’t shop for discounts, either.

The “new” data are from 2011, but the government has been collecting price data for years in a less manageable format. Providing better access to government data has been a priority for the Obama administration; a new executive order this week requires new and updated government information to be computer-readable by default.

It may be hard to dig through the spreadsheet as the government provided it, but The New York Times has a tool that lets you see how prices at your local hospitals compare with the national average.

The new data include charges at more than 3,000 U.S. hospitals for the top 100 most frequently billed procedures paid under Medicare. They represent about 7 million Medicare-paid procedures, which was about 60 percent of them for that year.

The Post adds:

The hospital charges being released Wednesday — all from 2011 — show the hospitals’ average list prices. Adding another layer of opacity, Medicare and private insurance companies typically negotiate lower charges with hospitals. But the data shed light on fees that the uninsured could pay.

Hospitals argue that these charges don’t reflect the cost to consumers and also help subsidize bills for the uninsured. American Hospital Association vice president Carol Steinberg told the Post, “The [list of charges] can be confusing because it’s highly variable and generally not what a consumer would pay. Even an uninsured person isn’t always paying the chargemaster [list] rate.”

But isn’t the fact that they ever do bad enough? The data show the nationwide cost for joint replacements varies from $5,304 to $223,373, with an average of $52,063.

Despite the variance, there are some trends in the data. Six states tended to have the highest prices: California, Florida, Nevada, New Jersey, Pennsylvania and Texas.