The Center for Medicare and Medicaid Services (CMS) released highly-anticipated data on Wednesday that outlines what hospitals across America charge for common inpatient medical services. The takeaway from the new numbers? There is no rhyme or reason to what different hospitals charge for the same procedures across geographic regions (or even within the same region), and prices can fluctuate by over $100,000 in the most extreme cases.
The CMS data is comprised of charge records from over 3,300 hospitals spanning 306 localities, and detail the costs of many of the most common inpatient procedures, such as treatments for heart failure, chest pain, respiratory infections, and lower limb replacements. The Huffington Post has a helpful graphic mapping the prices that hospitals throughout the New York and New Jersey areas charge patients for treating chronic obstructive pulmonary disease (COPD), which helps illustrate just how significant the disparities can be:
These numbers confirm a recent Time Magazine investigative report that found much of the same trend throughout the U.S. And the biggest victims of this rampant price variation — and apparent price-gouging — are the poor, the uninsured, and the underinsured. Public entitlements such as Medicare are relatively protected, since the government has the power to negotiate blanket prices and reimbursement rates for specific services. But private insurers — and, of course, the uninsured — don’t have that same capacity, making them subject to the whims of the hospitals they do business with. In essence, that means that poor people’s medical and financial stability are left up to pure luck, dependent on whether or not the hospital they visit charges reasonable rates.
As Obama Administration officials explained, there isn’t any feasible economic reason for this cost variation — and reformers are hoping that the publication of the data will shame hospitals into changing these practices and acting in good faith: