Wide Variance in What Hospitals Charge Exposed in
Data Release by Obama Administration
Consumers don’t know what hospitals charge them or
their insurance company; info aimed at helping them make smart choices
May 8, 2013 – The cost of healthcare just became a
lot more transparent with the release of information by Health and Human
Services on what hospitals charge for common inpatient services. The
information shows an extreme variance across the country and even within
“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,” said HHS Secretary
“This data and new data centers will help fill that
This three-part initiative will give consumers –
for the first time – information on hospital charges, she said.
Also today, HHS made approximately $87 million
available to states to enhance their rate review programs and further
health care pricing transparency. In an example of how these data might
be used, the Robert Wood Johnson Foundation (RWJF) is planning a data
visualization challenge which will further the dissemination of these
data to larger audiences.
The data posted today 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
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,
To make these 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.
The Affordable Care Act also makes available many
tools to help ensure consumers, Medicare, and other payers get the best
value for their health care dollar. Medicare is beginning to pay
providers based on the quality they provide rather than just the
quantity of services they furnish by implementing new programs such as
value-based purchasing and readmissions reductions.
HHS awarded $170
million to states to enhance their rate review programs, and since the
passage of the Affordable Care Act, the proportion of insurance company
requests for double-digit rate increases fell from 75 percent in 2010 to
14 percent so far in 2013.
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