Health Insurance Rates

By Susan Abram and Peter Fullam, Staff Writers
Posted: 05/09/2013 05:50:17 PM PDT

Database: Average charges for procedures by California hospitals

Data released this week by the federal government that show a wide variation of what hospitals charge Medicare for everything from pacemakers to hip replacement to obstructive pulmonary disease may bolster a discussion on fair pricing but does little to help the average consumer understand what they are paying for, health policy experts said.

As part of an effort to be more transparent, the Department of Human Health Services released the massive database to show disparities across the country and within communities of what hospitals charged for common inpatient procedures in 2011. A hospital in Ada, Oklahoma, for example, has an average charge of $5,300 for a joint replacement while the same procedure costs $223,000 at Garfield Medical Center in Monterey Park.

At Cedars-Sinai Medical Center, the average charged for a pacemaker procedure was $196,377 in 2011, while at Citrus Valley Medical Center in Covina the procedure cost less than half at $64,190.

But does that information mean a patient seeking an artificial device should go to Covina or Oklahoma?

“If I’m a Medicare beneficiary, do I make a decision based on charges to Medicare? No,” said Gerald Kominski, professor of Health Services and director of the UCLA Center for Health Policy Research. “Medicare is paying the bill for our hospitalization and there are generally little or no out-of-pocket expenses to the beneficiary.”

Kominski said the data do show consumers the complexities and lack of regulations on what is charged to Medicare and what is reimbursed. Those discrepancies could eventually trickle down to the uninsured patient, but without data on what hospitals charge private insurers, there’s no way to know for sure how it affects many consumers.

“I think it’s important to release this kind of information because it also calls attention to the fact that there is a difference of what hospitals charge and what they accept as payment, but this big difference creates confusion and lack of consumer confidence in the health care that we receive,” Kominski said.

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