Price disparities: Hospital charges, insurance payments vary for same procedures

Many hospitals have different prices for patients under their care for the same procedures, according to MedPage Today, which surveyed a variety of hospitals regarding what they charge both insured and uninsured patients.  

The tiny 22-bed Sutter Maternity and Surgery Center of Santa Cruz sent the publication not just its chargemaster rates, but its reimbursement rates and patient payment responsibility for several procedures.

For example, a knee arthroscopy had charges ranging from $13,452 to $19,187. But what insurers pay ranged from $2,681 to $13,607, or a more than five-fold difference. A colonoscopy and accompanying biopsy had charges ranging from $1,552 to $2,320. Insurer payments ranged from $849 to $1,773.

Paul Levy, a former hospital CEO in Boston, explained the differences to MedPage Today:  "When we would negotiate for my place, there was one set of ranges for local insurance companies, which had a great deal of presence in our market. But the national companies, who would just fly by when they had a patient in Boston, we would charge more," he said, adding that "it's all about market power" and that there is really no differential based on the actual cost of delivering the care.

Transparency in what individual insurers pay hospitals for their claims has been touted as a way to keep healthcare costs under control. A study released last year by the Center for Studying Health System Change and the Gary and Mary West Health Policy Center concluded that a nationwide all-claims database could help shave $100 billion a year on healthcare delivery in the United States.

Few hospitals or insurers have been willing to disclose the information, claiming that it would erode their competitiveness. In some states that have been planning all-claims databases, such as Vermont, insurers and providers have sued to stop the process. And according to MedPage Today, confidentiality clauses between hospitals and insurers often keep such data in the dark for most consumers

To learn more:
- read the MedPage Today article

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