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Administration Offers Consumers An Unprecedented Look at Hospital Charges

Source: CMS

Posted on 09 May 2013 by Neilson

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Hospital costsToday, as part of the Obama administration’s work to make our health care system more affordable and accountable, Health and Human Services (HHS) Secretary Kathleen Sebelius announced a three-part initiative that for the first time gives consumers information on what hospitals charge.  New data released today show significant variation across the country and within communities in what hospitals charge for common inpatient services.  Also today, HHS made approximately $87 million available to states to enhance their rate review programs and further health care pricing transparency. In an example of how these data might be used, the Robert Wood Johnson Foundation (RWJF) is planning a data visualization challenge which will further the dissemination of these data to larger audiences.

“Currently, consumers don’t know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city,” Secretary Sebelius said. “This data and new data centers will help fill that gap.” 

The data posted today on CMS’s website include information comparing the charges for services that may be provided during the 100 most common Medicare inpatient stays.  Hospitals determine what they will charge for items and services provided to patients and these “charges” are the amount the hospital generally bills for an item or service. 

"Transformation of the health care delivery system cannot occur without greater price transparency," said Risa Lavizzo-Mourey, M.D., RWJF president and CEO. "While more work lies ahead, the release of these hospital price data will allow us to shine a light on the often vast variations in hospital charges."

These amounts can vary widely.  For example, average inpatient charges for services a hospital may provide in connection with a joint replacement range from a low of $5,300 at a hospital in Ada, Okla., to a high of $223,000 at a hospital in Monterey Park, Calif. 

 Even within the same geographic area, hospital charges for similar services can vary significantly. For example, average inpatient hospital charges for services that may be provided to treat heart failure range from a low of $21,000 to a high of $46,000 in Denver, Colo., and from a low of $9,000 to a high of $51,000 in Jackson, Miss.

To make these data useful to consumers, HHS is also providing funding to data centers to collect, analyze, and publish health pricing and medical claims reimbursement data.  The data centers’ work helps consumers better understand the comparative price of procedures in a given region or for a specific health insurer or service setting. Businesses and consumers alike can use these data to drive decision-making and reward cost-effective provision of care.

The Affordable Care Act also makes available many tools to help ensure consumers, Medicare, and other payers get the best value for their health care dollar.  Medicare is beginning to pay providers based on the quality they provide rather than just the quantity of services they furnish by implementing new programs such as value-based purchasing and readmissions reductions.  HHS awarded $170 million to states to enhance their rate review programs, and since the passage of the Affordable Care Act, the proportion of insurance company requests for double-digit rate increases fell from 75 percent in 2010 to 14 percent so far in 2013.

To view the new hospital dataset, please go to:


The Old Guy May 9 2013 2:10PM Report Abuse
Come on, nobody, especially Medicare, pays what is on the bill. The only people who get to pay the first bill is somebody with no insurance. Medicare pays whatever Medicare says it will pay, no matter what is billed. If the proceedure is billed at $5,000 and Medicare approves $850, all the hospital will get from Medicare is 80% or $680 the other 20% is paid by the patient or his/her Medicare Supplement. The balance is written off, as if it never existed, so lets be honest and report what Medicare approves not the inflated figure of what is billed. For those of you not on Medicare, your insurance company has negotiated a substantial discount, but yes, there are variances. That is what the HSA (Healthcare Savings Accounts) with their high deductibles were started, to encourage people to shop for better prices, since what was in their HSA is theirs to keep and spend later. The biggest problem is that noone other than Golden Rule Insurance ever trained their people how to shop. This might help, but it needs to show the insurance discounted prices to make a real difference in helping people keep their costs down.
Stephen Franz May 9 2013 10:01AM Report Abuse
HMMM, hospital stay's are risky business. I would rather pick a hospital based on their success rather than price.
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