WASHINGTON — The revelation Wednesday that hospitals within the same city sometimes charge tens of thousands of dollars more for the same treatment sheds new light on the mystery of just how high a hospital bill might go, and whether it’s cheaper for uninsured patients to get the care somewhere else.
But it doesn’t answer the big question: Why do some hospitals charge 20 or even 40 times more than others?
“It doesn’t make sense,” said Jonathan Blum, director of the government’s Center for Medicare & Medicaid. The higher costs don’t reflect better care, he said, and can’t be explained by regional economic differences alone.
Blum said he hopes making the information available without charge to the public will help generate answers to the riddles of hospital pricing, and put pressure on the more expensive hospitals.
The fees that Medicare pays hospitals aren’t based on their charges, Blum said, but patients who are without government or private medical coverage are subject to them. The new information should help those patients decide where to get care, he said.
There are vast disparities nationally. The average charges for joint replacement range from about $5,300 at an Ada, Okla., hospital to $223,000 in Monterey Park, Calif.
It’s not just national or even regional geography. Hospitals within the same city also vary wildly.
In Jackson, Miss., average inpatient charges for services that may be provided to treat heart failure range from $9,000 to $51,000, the Department of Health and Human Services said.
Hospitals usually receive less money than they charge, however. Their charges are akin to a car dealership’s “list price.” Most patients won’t be hit with these bills, because they are paid by their private insurance, Medicare or Medicaid at lower rates.
Insurance companies routinely negotiate discounted payments with hospitals.
“These charges really don’t have a direct relationship with the price for the average person,” said Chapin White of the nonprofit Center for Studying Health System Change. “I think the point is to shame hospitals.”
The charges do show up on the bills of people without medical coverage, many of whom try to negotiate smaller fees for themselves. And they could affect people paying for care that is outside their insurance company’s network. Hospitals say they frequently give the uninsured discounts.
“This is the opening bid in the hospital’s attempt to get as much money as possible out of you,” White said of the listed charges.
And some people pay full price, or try to afford it, because they don’t know they can bargain for a discount, White said.
FILE - In this April 12, 2013 file photo, Health and Human Services (HHS) Secretary Kathleen Sebelius testifies on Capitol Hill in Washington before the House Ways and Means Committee hearing on President Barack Obama's budget proposal for fiscal year 2014, and the HHS. Hospitals within the same city sometimes charge tens of thousands of dollars more for the same procedure, figures the government released for the first time Wednesday show. The list sheds light on the mystery of just how high a hospital bill might go and whether it's cheaper to get that care somewhere else. (AP Photo/J. Scott Applewhite)×