The Centers for Medicare & Medicaid Services today for the first time released data comparing average hospital charges for the 100 most common Medicare claims, illustrating wide variations not just across regions but within cities.
"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," U.S. Department of Health & Human Services Secretary Kathleen Sebelius said in an announcement. "This data and new data centers will help fill that gap."
The new data centers to which she was referring will use HHS funding to collect, analyze and publish the pricing and claims reimbursement data, according to the announcement. HHS said it is making $87 million available to states to "enhance their rate review programs and further healthcare pricing transparency."
The data centers will make it easier to compare prices in a region, or by health insurer or service setting, CMS said. As is, the CMS comparison chart is huge and cumbersome to wade through, listing what each of about 3,300 hospitals charges for the 100 common diagnoses.
The Robert Wood Johnson Foundation also is launching a data-visualization challenge to push the information out to larger audiences, according to CMS.
The agency also highlighted dramatic price variances including charges ranging from $5,300 to $223,000 for a joint replacement in different states and prices for heart-failure treatment ranging from $9,000 to $51,000 in the same city.
A New York Times article highlighted similar ranges, including average pneumonia treatments in Dallas varying from $14,610 to $38,000.
The Times noted the data don't explain the reasons for the variances, other than Medicare paying slightly more for treatment at some academic medical centers or in high-cost areas.
Jonathan Blum, director of the agency's Center for Medicare, told the newspaper he anticipated some hospitals would charge double or triple what others charge. But a Times analysis found hospitals on average charged three to five times the typical Medicare reimbursement, and that variations between hospitals were even higher.
The American Hospital Association cited a "cat-and-mouse game" between hospitals and insurers that affects what hospitals charge, the newspaper said.