Billing data just released by the Medicare program has reinforced the wide disparity in what hospitals charge for their services--in this case, joint replacement surgery.
What hospitals charge in and around the nation's second-largest city varies widely, according to the Los Angeles Times. As an example:
- Centinela Hospital Medical Center in Inglewood charged an average of $237,063.
- Kaiser Permanente's West Los Angeles Medical Center charged just $39,059.
But Medicare paid both hospitals just a fraction of their charges, $17,609 for Centinela and $12,457 to Kaiser.
The disparities, the newspaper reported, between the hospitals are also out of line for the Medicare national average of joint replacement surgery charges, which is at $54,239.
Centinela Hospital is owned by for-profit hospital operator Prime Healthcare Services, which runs a business model that tends to focus on maximizing revenue. But a company spokesperson told the L.A. Times that billed charges are "misleading, confusing and in many cases inaccurate." Kaiser Permanente is a not-for-profit healthcare system.
Joint replacement surgeries are the most common procedure undertaken in hospitals for which Medicare is billed, paying out $6.6 billion in 2013. And like what hospitals charge for the procedure, the rates for which Medicare enrollees undergo such a surgery also varies widely by geography, according to NBC News.
A reference pricing initiative launched by the California Public Employees Retirement System showed some success in reducing the costs for joint replacement surgeries.
The Centers for Medicare & Medicaid Services began releasing Part B billing information about a year ago, with the most recent release occurring earlier this week, although it remains to be seen whether such pricing has an impact on patients and the care decisions they make.