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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