Hospitals within the same city sometimes charge tens of thousands of dollars more for the same procedures, according to figures the government released for the first time Wednesday. The federal list sheds new light on the mystery of just how high a hospital bill might go -- and whether it's cheaper to get the care somewhere else.
There are vast disparities nationally. The average charges for joint replacement range from about $5,300 at an Ada, Okla., hospital to $223,000 in Monterey Park, Calif.
It's not just national or even regional geography. Hospitals within the same city also vary wildly. In Jackson, Miss., average inpatient charges for services that may be provided to treat heart failure range from $9,000 to $51,000, the Department of Health and Human Services said.
Hospitals usually receive less money than they charge, however. Their charges are akin to a car dealership's "list price." Most patients won't be hit with these bills, because they are paid by private insurance, Medicare or Medicaid. The government and insurance companies routinely negotiate lower payments with hospitals.
"These charges really don't have a direct relationship with the price for the average person," said Chapin White of the nonprofit Center for Studying Health System Change. "I think the point is to shame hospitals."
But the charges do show up on the bills of people without medical coverage, many of whom try to negotiate smaller fees for themselves. And they could affect people paying for care that is outside their insurance company's network. Hospitals say they frequently give the uninsured discounts.
Some people still pay full price, or try to, because they don't know they can bargain for a discount, White said.
"[For them] this is the opening bid in the hospital's attempt to get as much money as possible out of you," he said.
The department released a list of the average charges at 3,300 hospitals for each of the 100 most common Medicare inpatient services. The prices, from 2011, represent about 60 percent of Medicare inpatient cases.
The Obama administration says consumers and businesses can use the information to make better choices and pressure hospitals to set reasonable prices. Hospital charges are typically confusing and unpredictable.
"Currently, consumers don't know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city," said Health and Human Services Secretary Kathleen Sebelius. The list will help fill that gap, she said.
The department also is making $87 million in federal money available as grants to states to improve their hospital rate review programs and get more information about health care charges to patients.