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Hospital charge data reveal variations in procedure prices

Wednesday, May 8, 2013 | 8:01 p.m. CDT; updated 8:17 p.m. CDT, Wednesday, May 8, 2013

COLUMBIA — Data released by the federal government on Wednesday show that Boone County residents generally pay less than the national average for the 100 most common inpatient procedures.

It was the first time the data disclosing the list prices hospitals charge — compared to what Medicare covers — has been made available to the public.

Regionally and nationally, the numbers revealed two things. First, there are wide variations in cost for the same procedure among hospitals in the same region, with no apparent pattern or reason. Second, there is a large gap between the actual covered charges from the hospitals' "chargemasters" and actual total payments from Medicare.

For example, Boone Hospital Center had a list price of $16,031 and a $5,157 payment from Medicare for pancreatic disorder treatments, while University Hospital's list price was $30,830 with a $9,549 payment from Medicare for the same procedures.

The chargemaster, according to healthaffairs.org, is a file system that all hospitals maintain. These files contain billable procedure codes with descriptions and the hospital's list prices. 

The chargemaster was part of the focus of Steven Brill's widely discussed Time magazine expose, "Bitter Pill: Why Medical Bills Are Killing Us," which examined the way hospitals bill.

Before the release of the data on Wednesday by the Centers for Medicare & Medicaid Services, the price of medical care has not been easily accessible to the public. The disclosure of costs is a part of the Obama administration’s work to make health care more affordable and transparent for consumers.

Bob Hughes, president and chief executive of the Missouri Foundation for Health, said transparency is a symbolic step toward helping people understand the current health care situation.

But much of the report might be less applicable to people with health insurance whose companies negotiate lower charges for them, Hughes said.

“It’s much more important for people without insurance because when they go to the hospital to get care, they get the list bill price and don’t know they can negotiate it,” he said.

Hughes said he hopes the data can help people who are underinsured or uninsured better understand medical costs.

“It will be interesting to see how organizations and people can use this information and to see if it generates interest and demand for more (information),” Hughes said. “I’m hopeful that will happen.”

Supervising editor is Katherine Reed.


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