US hospitals charge Medicare widely varying amounts for the same medical procedure, even when those hospitals are in the same city or right across the street from each other, according to data released Wednesday by the federal government. The data are attracting lots of attention from the media, but the findings probably won’t surprise Massachusetts consumers.
Similar information for Massachusetts hospitals, published by the state for several years, also shows startling disparities among hospitals’ prices.
It’s important to note a major difference in the national and state data. The US Centers for Medicare and Medicaid Services found that some hospitals submit bills as much as 20 times higher than other hospitals for the same care, but neither Medicare nor private insurers pay these charges. Medicare pays hospitals deeply discounted national rates, adjusted for factors such as whether hospitals train new doctors or care for extremely-ill patients.
For example, Brigham and Women’s Hospital charged Medicare $36,111 on average in 2011 for a patient treated for a heart attack with no complications. That is six times as much as the $5,987 charged on average by Winchester Hospital for the same illness. But Medicare paid the Brigham $8,087 on average, less than twice as much as the $4,869 it reimbursed Winchester.
It’s uninsured patients who usually suffer from the inexplicably high charges, when hospitals bill them the full freight for their care, as chronicled by Steven Brill in Time Magazine earlier this year.
During a phone call with reporters, Health and Human Services Secretary Kathleen Sebelius said that allowing consumers to more easily compare costs puts pressure on providers to keep prices low. Hospitals that charge “three to four times more’’ will face “additional scrutiny,’’ while others will “win new customers,’’ she said.
The Massachusetts data document variation in the actual prices paid by insurers, which is far smaller, but still can vary twice as much among hospitals. Providers’ market clout has been a major factor in the prices paid by Massachusetts insurers, according to Attorney General Martha Coakley’s office.
“Transparency on charges is like step one. We are on step 3 and a half,’’ said Aron Boros, executive director of the state’s Center for Health Information and Analysis.
Under the state’s new health care cost-control law, insurers will be required in October to post online detailed price information about procedures at individual hospitals. Providers must do the same in January.
Still, the federal data are interesting and worth perusing. The Washington Post posted a terrific interactive graphic that allows consumers to easily look up Medicare charges for certain procedures by hospital.
The data are also an important step nationally toward greater openness of information that was once a closely guarded secret.