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Hospital Charges Vary Widely

Hospital Charges Vary Widely

April 27th, 2012 by Mark Huffman of ConsumerAffairs in News

If you are a savvy consumer, you probably shop around before you buy. But what if you are stricken with a sudden ailment, such as appendicitis? There's not a lot of time to shop around for the best price on medical care.

As a result, you and your insurance provider are left at the mercy of whatever hospital you are admitted to. If you are under-insured or uninsured, that can be bad news indeed.

According to a provocative new University of California San Francisco (UCSF) analysis, patients are all too often left in the dark about how and what hospitals charge for their medical care - even in the face of a mounting push nationally for consumers to have a voice in how their health care dollars are spent.

Routine appendicitis cases

The study looked at nearly 20,000 cases of routine appendicitis at 289 hospitals and medical centers throughout California. The patients - all adults - were admitted for three or fewer days.

The researchers uncovered an enormous discrepancy in what different hospitals charge, ranging from a low of $1,529 to a high of nearly $183,000. The median hospital charge was $33,611. The startling cost variation reveals a "broken system,'' the authors said.

"Consumers should have a reasonable idea of how much their medical care will cost, but both they and their health care providers are often unaware of the costs,'' said lead author Renee Y. Hsia, MD, an assistant professor of emergency medicine at UCSF.

Our consumer culture is all about shopping around for the best deal. Unfortunately, the healthcare system just isn't set up that way.

Impossible to predict

"It is nearly impossible - even for me, as someone who studies this - to predict what someone's hospital bill will be," Hsia said. "Our system doesn't have a good way of regulating charges."

Patients - particularly those in pain and in need of swift treatment - are often in a poor position to gauge the appropriateness of their care, instead relying on the advice of medical professionals.

"Price shopping is improbable, if not impossible, because the services are complex, urgently needed, and no definitive diagnosis has yet been made,'' the researchers wrote.

Even if patients had the time and expertise to price shop, hospitals often charge inconsistent prices for seemingly similar services. Much of the issue stems from the complex and often arcane practice of medical billings in which patients are not necessarily billed for their actual cost of care.

Insured patients "are shielded from charges, while the under-insured or uninsured see staggeringly high numbers without understanding what the charges mean, let alone if they are appropriate,'' the authors said.