A new database has revealed the insane cost differences from one hospital to the next even when the procedure may be exactly the same. The Federal Database of National Healthcare costs was made public today, revealing exactly how much you’re being charged (or over-charged) for healthcare.
More often than not, patients who don’t have health insurance will end up paying much more than they have to when there were less expensive options nearby. For example, in the city of Los Angeles, if you went into heart failure and ended up at Pacific Alliance Medical Center, you’d shell out $37, 532 dollars if you didn’t have insurance. If you were in the city of Riverside, just two hours away, the same procedure would cost $14, 458.
The insane differences not only punish those who are insured but are particularly brutal on the 49 million uninsured Americans. The prices shape what everyone pays for healthcare and how much private insurers would surrender in reimbursement for the services rendered. That in turn influences the premiums those companies charge their customers.
The Obama Administration offered up the data in hopes that its release would force hospitals to take greater heed of competitors in their area while arming patients with the information they need to seek a better deal.
The data could also give insurance companies the leverage they need to broker deals with hospitals.
Jonathan Blum, Director of the Center for Medicare stated:
“Our purpose for posting this information is to shine a much stronger light on these practices. What drives some hospitals to have significantly higher charges than their geographic peers? I don’t think anyone here has come up with a good economic argument. The very fact that prices are now public may bring change. Hopefully, it will cause hospitals themselves to take a hard look at their charge-master practices and to ask hard questions of themselves as an industry why there is so much variation.”
Public access to this data on pricing pulls back the curtain on one of the most troublesome characteristics of the American health care system: arbitrary pricing. There almost no listed base price for a procedure or why it’s priced the way it is.
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