WASHINGTON — The Obama administration made public on Wednesday previously unpublished hospital charges for the 100 most common inpatient treatments in 2011, saying a similar release of physician data is on the horizon.
The massive data file reveals wide variation in charges for these 100 services listed in hospitals’ “chargemasters” — industry jargon for what hospitals charge. The data set represents added transparency the administration hopes will influence consumer behavior.
“Making this available for free for the first time will save consumers money by arming them with information that can help them make better choices,” Health and Human Services Secretary Kathleen Sebelius said in a call with reporters Wednesday.
The data only include inpatient hospital services, but when asked about physician fees and other inpatient services, a top Centers for Medicare & Medicaid Services (CMS) official said those data could come later as the agency expands its price transparency initiative.
“We don’t have a set timetable for expansion for this data release,” Jonathan Blum, PhD, acting principal deputy administrator at CMS, said on the same call as Sebelius. “I think it is fair to say we intend to build upon this data release.”
Blum said multiple times in his call with reporters that CMS will study the impact this information has on consumer behavior and what value the public places on it.
Journalist Steven Brill — who wrote a March 4 Time magazine cover story on healthcare-pricing practices largely credited for CMS’ action Wednesday — said in a blog that Sebelius and CMS should next focus on outpatient services.
“The Feds need to publish chargemaster and Medicare pricing for the most frequent outpatient procedures and diagnostic tests at clinics — two huge profit venues in the medical world,” Brill wrote. “This will be harder — the government doesn’t collect that data as comprehensively — but those outpatient centers and clinics provide a huge portion of American medical care.”
A quick scan of the hospital data released Wednesday reveals wide variation for the same procedure in the same town.
For example, St. Dominic Hospital in Jackson, Miss., charged nearly $26,000 to implant a pacemaker while the University of Mississippi Medical Center across town charged more than $57,000 for the same procedure.
In Washington, the George Washington University Hospital charged nearly $69,000 for a lower-leg joint replacement without major complications. That same procedure cost just under $30,000 at Sibley Memorial Hospital — a nonprofit community hospital 5 miles away.
A joint replacement ranged from $5,300 at a hospital in Ada, Okla., to $223,000 at a hospital in Monterey Park, Calif., CMS said.
“Hospitals that charge two or three times the going rate rightfully face greater scrutiny,” Sebelius said.
Said Blum, “We’re really trying to help elevate the conversation and continue the conversation and to ask questions why there is so much variation.”
Common explanations for the varying costs — patients’ health status, hospital payer mix, teaching status — don’t seem accurate or clear from data CMS released, Blum said, adding that making such information public will help researchers, consumers, and others better ask questions and engage in debate over costs.
Opponents to such transparency note that chargemaster prices are irrelevant to most patients. Private insurance companies and Medicare negotiate their own prices with hospitals.
Instead, it’s only the uninsured who face the prices on the chargemaster.
“Most perniciously, uninsured people are the ones who usually pay the highest prices for their hospital care,” Ron Pollack, executive director of the liberal patient rights group Families USA here,said in a statement. “It is absurd – and, indeed, unconscionable – that the people least capable of paying for their hospital care bear the largest, and often unaffordable, cost burdens.”
The American Hospital Association (AHA) said healthcare’s “charge” system is a matter of financing that urgently needs updating.
“The complex and bewildering interplay among ‘charges,’ ‘rates,’ ‘bills’ and ‘payments’ across dozens of payers, public and private, does not serve any stakeholder well, including hospitals,”AHA president and chief executive Rich Umbdenstock said in a statement. “This is especially true when what is most important to a patient is knowing what his or her financial responsibility will be.”
The Federation of American Hospitals declined to comment.
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