The cost of delivering a child in California's hospitals ranges so widely that researchers cannot actually explain the reasons for a large proportion of the variations.
According to data compiled by researchers at the University of California San Francisco, hospitals charged anywhere from $3,296 to $37,227 for a vaginal delivery. The price of C-sections ranged from $8,312 to $70,908. They studied more than 109,000 births in order to reach their conclusions.
The researchers concluded that for-profit hospitals or those institutions with high labor costs charged more for childbirths. Lower-priced hospitals were usually in areas with less market competition. "However, the institutional and market-level factors included in our models explained only 35%-36% of the between-hospital variation in charges," they wrote.
Altogether, the hospitals billed $1.3 billion more than they received from insurers, the study found. On average, the discounted price insurers paid amounted to 37 percent of the hospital's original bill.
Price opacity at hospitals is a recurring issue. Few hospitals adhere to their chargemasters. Moreover, inflation and variations in pricing for even the smallest procedures or services are rampant. And prices paid by private insurers tend to be much higher than those paid by Medicare.
Renee Y. Hsia, M.D., a UCSF associate professor of emergency medicine and the study's lead author, slammed the price gaps in an announcement.
"Childbirth is the most common reason for hospitalization, and even for an uncomplicated childbirth, we see a staggering difference in what hospitals charge, even for the same, average patient," Hsia said. "These charges affect not only the uninsured, but also the fee-for-service reimbursements by some private insurers, which can translate to out-of-pocket costs for patients."
Hsia and the study's other authors said the current healthcare finance structure is outdated, particularly given the trend of cost-shifting to patients.
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