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Hospitals' fees vary widely for same care

May 8, 2013 12:00:00 AM PDT
Newly released Medicare data shows big differences in fees for the most common medical procedures from one hospital to another.

Hospitals kept their charges for medical procedures practically a secret. But a new massive federal database of national health care costs shows dramatic differences in what hospitals charge for the very same procedures.

"The data show huge variation in charges from hospital to hospital, including in those within the same community," said Todd Park, President Barack Obama's chief technology officer, during a press conference.

Park's study with the Centers for Medicare & Medicaid Services shows the 100 most common procedures and what the hospital charges Medicare.

For example, if you have acute renal failure, that means essentially your kidney stops working. That requires hospitalization and sometimes dialysis. If you are a patient at San Gabriel Valley Medical Center, the study says the hospital will bill Medicare more than $120,000. But at the Kaiser Foundation Hospital in Fontana, its charge is about $19,000. The highest in the state is Garfield Medical Center in Monterey Park at $241,000.

Another common procedure is heart stents. Doctors use them to keep blocked arteries open. If you're a patient at Providence St. Joseph Medical Center in Burbank, the procedure will be billed at nearly $140,000. About 20 miles away at Methodist Hospital of Southern California in Arcadia, the charge is about half at $67,000. In the Northern California city of Daly City, the cost at Seton Medical Center is a whopping $223,904, according to the study.

The study says even medical centers that are related by institutions can have extreme differences in charges.

Major joint replacement at the UC Davis Medical Center in Sacramento is almost $300,000. In Southern California at the medical center at UC San Diego, the cost is $48,000.

John Romley, an economist with the USC Schaeffer Center for Health Policy, says most patients won't be hit with these bills because Medicare routinely negotiates much lower charges for these procedures.

"Medicare gets to set its prices, what it's going to pay, on a national basis, and in fact, it isn't even as aggressive as it might be. It doesn't negotiate with individual hospitals," Romley said.

But it's a different story for the uninsured who could be facing the higher charges and a bigger bill.

"The insurer is not in the business of providing charitable services," Romley said. "Ultimately, we all have to cover those costs that the insurers pay through our premiums, so it does get passed along to consumers."

In response, Providence St. Joseph Medical Center said in a statement, "We know that hospital pricing is very complicated and not at all easy to understand, especially for patients and their families. Charges have been historically based on all of the factors that attribute to cost - from every itemized supply to procedures - but reimbursement is based on a single clinical diagnosis."

It added, "While we know a lot has to change, there will always be some differences in pricing between providers."


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