Data: Hospital charges soar for common ailments

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Charges for some of the most common inpatient procedures surged at hospitals across the country in 2012 from a year earlier, some at more than four times the national rate of inflation, according to data released by Medicare officials Monday.

While it has long been known that hospitals bill Medicare widely varying amounts -- sometimes many multiples of what Medicare typically reimburses -- for the same procedure, an analysis of the data by The New York Times shows how much the price of some procedures rose in just one year's time.

Experts in the health care world differ over the meaning of hospital charges.

While hospitals say they are unimportant -- Medicare beneficiaries and those covered by commercial insurance pay significantly less through negotiated payments for treatments -- others say the list prices are meaningful to the uninsured, to private insurers that have to negotiate reimbursements with hospitals or to consumers with high-deductible plans.

"You're seeing a lot more benefit packages out there with co-insurance amounts that require the holders to pay 20 percent of a lab test or 20 percent of an X-ray. Well, 20 percent of which price?" asked University of Southern California professor Glenn Melnick, who holds a Blue Cross of California endowed chair. "Some hospitals will charge 20 percent of what Blue Cross Blue Shield will pay; others will play games."

Charges for chest pain, for instance, rose 10 percent to an average of $18,505 in 2012, from $16,815 in 2011. Average hospital charges for digestive disorders climbed 8.5 percent to nearly $22,000, from $20,278 in 2011.

In 2012, hospitals charged more for every one of 98 common ailments that could be compared with the previous year. For all but seven, the increase in charges exceeded the nation's 2 percent inflation rate for that year, according to The Times' analysis.

Experts say the increase in the price of some of the most common procedures may be offsetting rising technology or drug costs, declines in the number of patients being admitted to hospitals and a leveling out of reimbursements from Medicare. Between 2011 and 2012, Medicare increased payment rates only 1 percent for most inpatient stays.

The number of patients admitted for chest pain under Medicare's fee-for-service plans plummeted more than 28,000, to 107,224 in 2012, and inpatients with digestive disorders decreased more than 29,000, to 217,514.

Overall, the number of Medicare patients discharged from hospitals for the comparable 98 most common diagnoses dropped from 7.45 million to 7.2 million. The total amount Medicare paid for their care also declined somewhat between 2011 and 2012, from $62.8 billion to $61.9 billion.

In an effort to reduce overall health care costs, hospitals have been encouraged to admit fewer patients for conditions such as asthma, for example, in favor of less-expensive outpatient care.

Still, hospital charges make up nearly a third of the nation's $2.7 trillion health care bill.

The data for 3,317 hospitals, released for the first time last year by the Centers for Medicare and Medicaid Services, again shows broad variations in what hospitals charge for the same procedure. While experts debate why one hospital charges significantly more than another for the same procedure, Medicare does pay slightly higher treatment rates to certain hospitals -- such as teaching facilities and hospitals in areas with high labor costs. Reasons for other discrepancies are less clear.

The new hospital charge data follows the release in April of Medicare's physician billing records for 2012. To some, the data is bringing increased transparency and fueling the ongoing national dialogue about financially debilitating health care bills faced all too often by consumers.

"We think this is a big deal. We think it's very important that people can have conversations about prevailing charges and variation in charges among hospitals," said Niall Brennan, acting director of the Offices of Enterprise Management at the Centers for Medicare and Medicaid Services. Mr. Brennan made his comments in Washington at Health Datapalooza, a conference focused on digital innovation in health care.

The administration also announced a platform called openFDA, which includes data on millions of drug-related adverse events and errors reported to the Food and Drug Administration by doctors and members of the public from 2004 to 2013.



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