The prices that North Bay hospitals charge for the same procedure vary widely from one facility to another, according to data released Wednesday by the federal government.
The public release of the data will help make the U.S. health care system more affordable and accountable, Health and Human Services Secretary Kathleen Sebelius said.
“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,” Sebelius said in a statement. “This data ... will help fill that gap.”
For example, Kaiser Permanente Medical Center in Santa Rosa charged $44,278 for a procedure to replace a major joint or reattach a lower extremity, while nearby Memorial Hospital charged an average of $136,762, according to Medicare billing data released by the U.S. Department of Health and Human Services.
In reality, Medicare and other insurers often pay hospitals far less than the “sticker price” charged by the hospitals, experts said. In the example above, Medicare paid an average of only $16,288 to Kaiser and $18,387 to Memorial Hospital.
“There are large parts of our health care system that just don't make a lot of sense,” said Anthony Wright, executive director of Health Access California, a consumer advocacy coalition. “The health care pricing and prices make no sense to both lay people and experts, and there needs to be a reform of how providers are paid.”
The vast disparities in how much hospitals charge reflect a variety of factors, including the populations each serve and the depth of specialties provided by the institution, health officials said. For example, Memorial Hospital is the region's sole level II trauma center, which raises the nonprofit hospital's costs.
“Memorial plays a singular role on the North Coast in terms of the complexity of care we provide,” hospital spokeswoman Katy Hillenmeyer said. “The fact that other hospitals refer us their most complex, sick patients, that factors into cost.”