Hospital producer prices barely budge; consumer prices tell another story

The price of production increased marginally for hospitals both last month and throughout 2013, AHA News Now reported. But the prices consumers paid rose by a much larger amount.

Data from the Bureau of Labor Statistics indicated overall hospital prices increased 0.4 percent in December 2013 from November 2013, and were 1.5 percent higher than they were compared to December 2012, according to the Producer Price Index. Physician producer prices were down 0.4 percent between last December and November, and were up 0.3 percent for the year.

However, the prices paid by consumers were a different story. According to BLS data, hospital prices for consumers rose 4.2 percent between December 2012 and last month, and were up 0.1 percent between November and December 2013. The disparity between the cost of such services and how much consumers pay for them are a concern as reports surface that hospitals and other medical providers are inflating costs. For example, hospital chargemasters bear little resemblance to what they actually collect from Medicare and private payers. Moreover, basic products, such as saline bags, can have their original prices inflated enormously.

That has prompted some hospitals to begin providing more transparency to patients, particularly as they endure cost-shifting from their health insurers.

For example, Miami Children's Hospital just cut the prices on their chargemasters by 30 percent, and are providing patients and their families with more financial information to help them calculate their out-of-pocket costs, Kaiser Health News reported.

"We need to re-craft how we talk about what we charge,'' Tim Birkenstock, Miami Children's chief financial officer, told Kaiser Health News. "And we need to do it in a way that people who use our facility understand what they have to pay.''

To learn more:
- read the AHA News Now article
- here's the BLS Consumer Price Index
- check out the BLS Producer Price Index
- read the Kaiser Health News article