Double Effing News Flash: Hospital Fees Inconsistent and Inexplicable
Newly released data from the Center for Medicare and Medicaid Services show that the nation’s hospitals charge wildly different fees for the same procedure. (See the NYT story here.) And while that information is really nothing new (or different from what was suspected), the fee differences are staggering and largely inexplicable. While some hospitals—particularly academic centers—justify their higher fees on the basis of a sicker (urban) patient population or higher bottom-line costs for teaching (pfft), I suspect these explanations are mostly BS. Generally I think these institutions charge what they charge because they can. And there’s really no incentive to do otherwise, given that most patients—who are privately insured or covered by Medicare or Medicaid—aren’t directly affected by the sticker shock. It’s the uninsured or marginally insured who may be stuck with a staggering hospital bill.
In a healthcare system that remains largely free-market, greater accountability of hospitals to justify exorbitant fees can only be demanded by consumers. And that’s unlikely to happen given the current structure of US healthcare and its financing. (Although I see no reason why ridiculously paid hospital administrators couldn’t go the way of the dodo bird. That certainly would be one simple cost-containment measure that could save millions of dollars.)
Update: The raw data from the CMMS are provided here and can be manipulated and filtered with the online tools (after a little operant conditioning). For instance, you can determine what hospitals are charging for a specific procedure in your state or city. To download the data into one of the various offered formats (like Excel), it appears that you have to sign in with an account (which is free).
For instance, for a permanent cardiac pacemaker implant without CC/MCC (complications and comorbities/major complications and cormbidities; DRG 244), hospital charges in the United States ranged from $15,128.14 (at Peninsula Regional Medical Center in Salisbury, MD) to an astonishing $167,628.42 (at Vista Medical Center East in Waukegan, IL). The government reimbursed in the range of $10,000 to $27,000 (one outlier reimbursement exceeded $43,000). The government’s reimbursement appeared to have little to do with the amount charged by the hospital.