PD Editorial: The arbitrary charges for hospital care

  • FILE - In this Dec. 20, 2011 file photo medical bills are spread out on the kitchen table of a cancer patient in Salem, Va. Hospitals across the country, and even 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, May 8, 2013. (AP Photo/Don Petersen, File)

Call it the sticker price.

Anyone who ever bought a new car knows what that is — the starting point for negotiations. Any resemblance to the actual price is coincidental. In real estate, they call it the listing price. It's negotiable, too.

Who knew that the principles for buying an Acura or an A-frame applied to an appendectomy?

OK, it isn't a complete surprise to students of health care economics, and it isn't a perfect analogy, either. Still, a new federal database reveals what hospitals typically bill for common procedures much as a window sticker itemizes the asking price for a new Cadillac.

But be warned: If you look, you're liable to experience sticker shock.

The database, compiled from Medicare billing records for the 100 most common diagnoses and treatments, shows that prices charged by hospitals are not only sky high, they vary so widely that it's hard to fathom any relationship to the actual cost of providing care.

In the North Bay, Kaiser Permanente Medical Center in Santa Rosa bills an average of $44,278 for a major joint replacement. Expect a bill for $136,762 from Memorial Hospital for the same procedure. To treat a respiratory infection, the average bill ranges from $22,972 at Ukiah Valley Medical Center to $126,146 at Marin General Hospital in Greenbrae.

In its own examination of the vast disparity in hospital charges across the country, Time magazine cited examples including a $1.50 charge for a single 325 mg dose of acetaminophen (Tylenol). The retail price: $1.49 for 100 pills.

Bear in mind: These are just the hospital's charges. Doctors' fees usually are billed separately.

Most people don't pay sticker price for a new car, and most people won't pay these prices for hospital treatment, either. Insurers negotiate discounts for policyholders (though they often cite rising hospital costs as a justification for increasing premiums), and reimbursement rates set by Medicare are considerably below hospital "chargemaster" rates.

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