Thursday, May 9, 2013

HHS Offers Unprecedented Look at Hospital Charges

For the first time, the Centers for Medicare and Medicaid Services released standardized data about healthcare costs at different hospitals around the country. According to a CMS press release Wednesday, the data that they collected included hospital-specific charges for the “more than 3,000 U.S. hospitals that receive Medicare Inpatient Prospective Payment System (IPPS) payments,” and compared the “top 100 most frequently billed discharges”. The data showed “significant variation across the country, and within communities, in what hospitals charge for common inpatient services.”

Some variation across the country is expected, due to different costs of living and different state insurance structures.  Due to insurance structure in Maryland, for example, the highest rate charge for a lower joint replacement was $36,000. This is compared to $160,832 for the same procedure at a medical center just outside Dallas.

The variation is not only across the county; an article by the Washington Post highlights the massive variation that can occur within the same city. In Washington, DC, for example, the Post found that “George Washington University’s average bill for a patient on a ventilator was $115,000, while Providence Hospital’s average charge for the same service was just under $53,000. For a lower joint replacement, George Washington University charged almost $69,000 compared with Sibley Memorial Hospital’s average of just under $30,000.”

Of course, these charges are an average of all billing amounts per procedure. Further, it is common for hospitals and insurers, including Medicare, to negotiate rates below the full charge.

The release of this data was part of a transparency push from CMS and the Obama administration. According to CMS, the Robert Wood Johnson Foundation (RWJF) is planning a data visualization challenge which will further the dissemination of these data. You can download the raw data here

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