Hospital Data Reveals Massive Price Swings Nationwide

Receiving the same treatment at two different hospitals might not necessarily be a difference in quality of care, but rather thousands of dollars in extra costs, according to a new report from the Centers for Medicare & Medicaid Services (CMS).

Collecting data from more than 3,000 U.S. hospitals that receive payment from the Medicare Inpatient Prospective Payment System (IPPS), CMS reveals how much hospitals were billing Medicare in Fiscal Year 2011 for commonly billed procedures.

“Currently, consumer don’t know what a hospital is charging them or their insurance company for a given procedure,” said Health and Human Services Secretary Kathleen Sebelius. “This data and new data centers will help fill that gap.”

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Since hospitals determine what they will charge for items and services provided to patients, the costs vary among local and national markets.

More northern states such as Idaho, Montana and North Dakota tended to have lower costs on average, whereas California, Florida and Texas were among the states with the costliest care.

In Idaho, the average cost of treating heart failure in 2011 was $22,146, while in California it cost on average $70,964.

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For the same treatment, Florida hospitals charged an average of $46,182, while in Texas the cost was $46,268. 

While the average cost of similar treatments might vary from  one state to the next, CMS found large price swings among local markets.

“There’s tremendous variation between hospitals,” said CMS Deputy Medicare Administrator Jordan Blum in a Washington Post article. “Geography doesn’t seem to explain it.”

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The cost of treating heart failure in Idaho was as little as $13,960 on the low end, with the highest billed treatment totaling $75,197. 

In California, heart failure treatment was slightly higher than the state’s average at $75,197, however, the cost of care was as low as $13,960.

The report from CMS is part of a larger initiative of the Obama Administration’s efforts to make the nation’s health care system more affordable and accountable.

“Transformation of the health care delivery system cannot occur without greater price transparency,” said Risa Lavizzo-Mourey, M.D. and president of the Robert Wood Johnson Foundation.

While more work lies ahead, says Lavizzo-Mourey, the release of such data can allow for further examination on the variations in hospital charges.

View the CMS report.

Written by Jason Oliva