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Who knew?
I was almost speechless when the federal government released data that show striking variation across America, and even within individual communities, in what hospitals charge patients. The 100 most frequently billed discharges of 2011 are represented in the data, and the associated DRGs represent close to 7 million discharges.
President Obama promised more transparency in and by government, and this headline from the Washington Post about CMS’s data-sharing move makes it crystal clear for all to see: "One hospital charges $8,000 – another, $38,000." Yes, for the same service. But that is just the tip of the iceberg. The article goes on to note that, according to hospitals’ once-secret "chargemaster" lists, the cost of joint replacements ranged from $5,304 in Ada, Okla., to a whopping $223,373 in Monterey, Calif. And, while a case of uncomplicated pneumonia may cost only $5,093 in Water Valley, Miss., you better hope you are not visiting Philadelphia when you get sick, or you can plan to tack on additional $119,000 to that bill. Surely, it is not the cost of the medications that accounts for this vast difference. National guidelines for treating pneumonia apply to all 50 states, so the care should be comparable. So what accounts for the extremes in hospital charges?
Okay, there’s the cost-of-living factor, and thus the hospitals’ overhead is undoubtedly drastically different in small-town U.S.A. vs. a popular metropolis, but it is shocking that this gap is so huge. While I have always known that there were differences in charges for medical services based on where you go, I never imagined such a stark contrast in the price tag for the same service in the same country – and sometimes even in the same city. As if the medical profession were not already struggling with its reputation eyes of the public. These data really paint of negative picture of the medical community.
So, what is the real significance of the discrepancy in these charges? For many with good insurance, nothing. Insurance companies decide what they are willing to pay for a given billing code and, typically, the rest is written off. Patients are not liable for the difference. Not quite true if you are uninsured.
Though the American Hospital Association states that centers often provide assistance to patients with meager finances, those who are most vulnerable and least able to pay for medical care may end up with the entire bill, frequently a bill that they will never be able to pay. That bill may eventually cause them to file for bankruptcy, which will adversely affect their lives and their children’s lives for many years to come – all because they became sick and assumed that the quality of care and the price for services rendered would be reasonable and comparable across all institutions.
While some may cringe at the revelation of the price discrepancy, I am glad this information came to light. Now consumers will be able to compare hospitals’ pricing as well as their quality measures and make better decisions about which hospital is best for them.
Dr. Hester is a hospitalist with Baltimore-Washington Medical Center, Glen Burnie, Md., who has a passion for empowering patients to partner in their health care. She is the creator of the Patient Whiz, a mobile app for iOS. This blog, "Teachable Moments," appears regularly in Hospitalist News.
Who knew?
I was almost speechless when the federal government released data that show striking variation across America, and even within individual communities, in what hospitals charge patients. The 100 most frequently billed discharges of 2011 are represented in the data, and the associated DRGs represent close to 7 million discharges.
President Obama promised more transparency in and by government, and this headline from the Washington Post about CMS’s data-sharing move makes it crystal clear for all to see: "One hospital charges $8,000 – another, $38,000." Yes, for the same service. But that is just the tip of the iceberg. The article goes on to note that, according to hospitals’ once-secret "chargemaster" lists, the cost of joint replacements ranged from $5,304 in Ada, Okla., to a whopping $223,373 in Monterey, Calif. And, while a case of uncomplicated pneumonia may cost only $5,093 in Water Valley, Miss., you better hope you are not visiting Philadelphia when you get sick, or you can plan to tack on additional $119,000 to that bill. Surely, it is not the cost of the medications that accounts for this vast difference. National guidelines for treating pneumonia apply to all 50 states, so the care should be comparable. So what accounts for the extremes in hospital charges?
Okay, there’s the cost-of-living factor, and thus the hospitals’ overhead is undoubtedly drastically different in small-town U.S.A. vs. a popular metropolis, but it is shocking that this gap is so huge. While I have always known that there were differences in charges for medical services based on where you go, I never imagined such a stark contrast in the price tag for the same service in the same country – and sometimes even in the same city. As if the medical profession were not already struggling with its reputation eyes of the public. These data really paint of negative picture of the medical community.
So, what is the real significance of the discrepancy in these charges? For many with good insurance, nothing. Insurance companies decide what they are willing to pay for a given billing code and, typically, the rest is written off. Patients are not liable for the difference. Not quite true if you are uninsured.
Though the American Hospital Association states that centers often provide assistance to patients with meager finances, those who are most vulnerable and least able to pay for medical care may end up with the entire bill, frequently a bill that they will never be able to pay. That bill may eventually cause them to file for bankruptcy, which will adversely affect their lives and their children’s lives for many years to come – all because they became sick and assumed that the quality of care and the price for services rendered would be reasonable and comparable across all institutions.
While some may cringe at the revelation of the price discrepancy, I am glad this information came to light. Now consumers will be able to compare hospitals’ pricing as well as their quality measures and make better decisions about which hospital is best for them.
Dr. Hester is a hospitalist with Baltimore-Washington Medical Center, Glen Burnie, Md., who has a passion for empowering patients to partner in their health care. She is the creator of the Patient Whiz, a mobile app for iOS. This blog, "Teachable Moments," appears regularly in Hospitalist News.
Who knew?
I was almost speechless when the federal government released data that show striking variation across America, and even within individual communities, in what hospitals charge patients. The 100 most frequently billed discharges of 2011 are represented in the data, and the associated DRGs represent close to 7 million discharges.
President Obama promised more transparency in and by government, and this headline from the Washington Post about CMS’s data-sharing move makes it crystal clear for all to see: "One hospital charges $8,000 – another, $38,000." Yes, for the same service. But that is just the tip of the iceberg. The article goes on to note that, according to hospitals’ once-secret "chargemaster" lists, the cost of joint replacements ranged from $5,304 in Ada, Okla., to a whopping $223,373 in Monterey, Calif. And, while a case of uncomplicated pneumonia may cost only $5,093 in Water Valley, Miss., you better hope you are not visiting Philadelphia when you get sick, or you can plan to tack on additional $119,000 to that bill. Surely, it is not the cost of the medications that accounts for this vast difference. National guidelines for treating pneumonia apply to all 50 states, so the care should be comparable. So what accounts for the extremes in hospital charges?
Okay, there’s the cost-of-living factor, and thus the hospitals’ overhead is undoubtedly drastically different in small-town U.S.A. vs. a popular metropolis, but it is shocking that this gap is so huge. While I have always known that there were differences in charges for medical services based on where you go, I never imagined such a stark contrast in the price tag for the same service in the same country – and sometimes even in the same city. As if the medical profession were not already struggling with its reputation eyes of the public. These data really paint of negative picture of the medical community.
So, what is the real significance of the discrepancy in these charges? For many with good insurance, nothing. Insurance companies decide what they are willing to pay for a given billing code and, typically, the rest is written off. Patients are not liable for the difference. Not quite true if you are uninsured.
Though the American Hospital Association states that centers often provide assistance to patients with meager finances, those who are most vulnerable and least able to pay for medical care may end up with the entire bill, frequently a bill that they will never be able to pay. That bill may eventually cause them to file for bankruptcy, which will adversely affect their lives and their children’s lives for many years to come – all because they became sick and assumed that the quality of care and the price for services rendered would be reasonable and comparable across all institutions.
While some may cringe at the revelation of the price discrepancy, I am glad this information came to light. Now consumers will be able to compare hospitals’ pricing as well as their quality measures and make better decisions about which hospital is best for them.
Dr. Hester is a hospitalist with Baltimore-Washington Medical Center, Glen Burnie, Md., who has a passion for empowering patients to partner in their health care. She is the creator of the Patient Whiz, a mobile app for iOS. This blog, "Teachable Moments," appears regularly in Hospitalist News.
