Further evidence of how weird hospital pricing is

The federal government last year for the first time released the prices that hospitals charge for the 100 most common procedures. The Medicare data from the 2011 fiscal year demonstrated wild variations in what hospitals charge the health-care program for seniors – for example, a joint replacement could be priced anywhere between $5,300 and $223,000 depending on the facility.

Thanks to new data from the Centers for Medicare and Medicaid Services, we now have a better sense of how hospitals increase the listed prices year-to-year. CMS on Monday released a trove of new data, including the 2012 fiscal year prices for the same 100 common procedures.

The all-important caveat, however, is that Medicare and private insurers negotiate these prices down. However, those without insurance may face the sticker price.

For most procedures, the year-to-year prices increased less than 5 percent, CMS said – again, though, variation by procedure and geographic area is rampant. The average price for treating chest pain grew about 10 percent between 2011 and 2012, the largest increase of any Medicare diagnoses, while average prices for other procedures barely ticked up.

Hospital charges for joint replacement, the most common of Medicare procedures, saw an average increase of $2,116 between the 2011 and 2012 fiscal years, according to CMS.

But in hospital pricing, location matters: the below map shows where hospitals' listed prices increased as much as roughly $7,000 to $13,000 in the course of a year.


(The Centers for Medicare and Medicaid Services)

The data released today provide a further window into the typically opaque world of hospital pricing, but this doesn't tell the full story. There's still a big debate about what's driving the major variations in pricing — Medicare officials, when they released the data for the first time last year, suggested patients' health status likely played somewhat of a factor. The hospitals themselves said certain types of facilities have higher cost structures.

Last year, Medicare officials seemed content to release the data as a way to foster public conversation about the way hospitals price their services, with the hope of pressuring the system to change. Today's new data continue that conversation.

Jason Millman covers all things health policy, with a focus on Obamacare implementation. He previously covered health policy for Politico.
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