When it comes to reducing one’s hospital bills, a key factor is location, location, location. A patient who undergoes joint-replacement surgery in Ada, Oklahoma, might receive a $5,300 hospital invoice for services rendered. But, according to an article in The Atlantic Cities, somebody who gets the same operation in Monterey Park, California, could be staring down the barrel of a much huger bill – $223,000, to be exact.
These were the average lowest and highest prices in 2011 for one particular joint-swapping procedure in the United States, according to federal data. They show in stark light how hospitals charge vastly different amounts for almost identical services, a peculiarity of the American healthcare system that Steven Brill wrote about this year in a Time cover story. Brill spent months investigating how hospitals calculate the bills they stick to patients; here’s Time describing one of his findings:
“Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer – Medicare – from even trying to negotiate the price of drugs.”
While some people have taken issue with Brill’s facts, the basic point that hospital pricing is opaque and often unfair is on target. The Centers for Medicare and Medicaid Services seem to be on board with this assessment. After Brill’s article appeared, the centers disgorged a trove of information dealing with what hospitals charged and what Medicare actually paid for 100 common procedures in 2011. The data revealed not just major differences among the states, but local variations as well. Reports Health 2.0: “For example, average inpatient hospital charges for services that may be provided to treat heart failure range from a low of $21,000 to a high of $46,000 in Denver, Colo., and from a low of $9,000 to a high of $51,000 in Jackson, Miss.”
The higher-value hospitals are clumped in the center of the United States. Two of the best-ranked ones hail from Arkansas – the Surgical Hospital in Little Rock and the Physicians’ Specialty Hospital in Fayetteville – followed by medical centers in Villa Rica, Georgia; Grinnell, Iowa; Paola, Kansas; Boise, Idaho; and Wichita.
Some of the lowest-ranked hospitals can be found in California locales like Porterville, Hemet, and Fresno, and in Floridian burgs like Dade City, Fort Myers, and Saint Petersburg, with others in Illinois, Oklahoma, Tennessee, New Mexico and elsewhere: