CMS Releases Data Showing Wide Variations In Hospital Pricing

Health and Human Services (HHS) released a data set encompassing the billing prices for popular procedures at over 3,000 of the nation’s hospitals. The information received heavy coverage in major outlets, including a front-page story in the New York Times. Most of the articles focus on how “wildly” pricing varies from hospital to hospital, even within the same region or city, and attempt to suss out the implications of this news.

In the front-page piece, the New York Times (5/8, A1, Meier, McGinty, Creswell, Subscription Publication) reports that the Centers for Medicare and Medicaid Services will release data for 3,300 hospitals Wednesday which how “wildly different” and “wide variations” in pricing for common procedures, “not only regionally but among hospitals in the same area or city.” Noting that hospitals sometimes charge 10 to 20 times what Medicare reimburses, the Times says the data raise “questions about how hospitals determine prices and why they differ so widely,” adding that it “is likely to intensify a long debate over the methods that hospitals use to determine their charges.” In an interview, Deputy Medicare Administrator Jonathan Blum said of releasing these figures, “Our goal is to make this information more transparent.”

The Washington Post (5/8, Kliff, Keating) “Wonkblog” also reports on the data, noting that the figures reveal “a health-care system with tremendous, seemingly random variation in the costs of services.” According to the article, experts say the variations are the result of “a health system that can set prices with impunity because consumers rarely see them – and rarely shop for discounts.” This piece also quotes Blum, who said, “Historically, the mission of our agency has been to pay claims. We’ll continue to pay claims, but our mission has also shifted to be a trusted source in the marketplace for information. We want to provide more clarity and transparency on charge data.”

The Huffington Post (5/8, Young) calls some of the pricing differences “staggering,” and notes that “people without health insurance pay vastly higher costs for care when less expensive options are often available nearby.” The article also focuses on the fact that until now, “Hospitals have protected their price lists – documents known as charge masters – as closely guarded secrets.” But with this data, CMS “lays out for the first time and in voluminous detail how much the vast majority of American hospitals charge for the 100 most common inpatient procedures billed to Medicare.”

In a piece for the Time (5/8) “Swampland” blog, Steven Brill, who wrote the March 4 Time cover story “Bitter Pill: Why Medical Bills Are Killing Us,” reports that Wednesday morning, HHS Secretary Kathleen Sebelius will announce “a groundbreaking initiative that will take a lot of the secrecy out of hospital billings.” Brill writes, “CMS public-affairs director Brian Cook told me that Sebelius’ action today comes in part in response to… ‘Bitter Pill.'”