Federal government releases data comparing hospital bills

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The federal government released data Wednesday that it claims make it easier for patients to price shop for hospital services. There are wide variations in cost nationwide, and in southern California. But some experts say the information is irrelevant, as it has little bearing on actual costs. 

The Centers for Medicare & Medicaid Services released the data. Agency officials touted it as a way to make hospitals more accountable for inflated billing procedures that result in wide price variations among facilities.
 
For instance, the list shows that if you suffer kidney failure with major complications, the bill could be as much as $241,000 at Garfield Medical Center in Monterey Park, or as little as $32,000 at Arrowhead Regional Medical Center in Colton. 
 
But critics say the "list prices" of surgical procedures have little, if any, relationship to what anyone pays.  And, they say, releasing them only creates more confusion surrounding a convoluted system of billing. 
 
 California Hospital Association spokeswoman Jan Emerson-Shea says the disparities in pricing are based on numerous cost factors faced by individual hospitals. For example, she says, a hospital with a trauma center is going to have higher costs than one with just a basic emergency room. And even the cost of earthquake retrofitting finds its way onto hospital bills. 
 
 But the greatest factor that causes hospitals to inflate bills, Shea says, is Medicare's own policies. 
 
"I mean that's the ironic thing, because Medicare doesn't pay the full cost of care, they pay less than the cost of care for their beneficiaries, so hospitals have to inflate their charges as part of the cost shift to find that money elsewhere," she says.
 
Shea says the inflated bills are irrelevant to most patients, since private insurance and government programs, such as Medicare, negotiate much lower rates for services.  
 
But others say that does nothing to help those without insurance, especially those who are unaware they can negotiate a better price. 
 
He says the federal price data is valuable information for uninsured consumers faced with paying out-of-pocket for hospital care, says Dr. Robert Brook,  a senior advisor at the RAND corporation in Santa Monica.

"I believe that if you don't have insurance and you're going to be faced with spending $25 a week for the rest of your life to pay to have your hernia fixed if you go to hospital A in Los Angeles and if you go to hospital B you will only pay $5 for the rest of your life, that's important," says Brook.

Meanwhile, the federal government is offering $87 million in grants for states to gather more information about how much hospitals charge their patients. 

Comparing the highest and lowest

This table lists the highest and lowest average bill for the three most common procedures or conditions at Southern California hospitals in 2011, according to data released Wednesday.

Source: Centers for Medicare & Medicaid Services

Highest Average Bill Procedure Classification Lowest Average Bill
Keck Hospital of USC
Average of $216,438.29 over 21 procedures
Septicemia with major complications Kaiser Foundation Hospital - Riverside
Average of $23,793.52 over 33 discharged patients
Monterey Park Hospital
Average of $223,373.07 over 15 procedures
Major joint replacement/Reattachment of lower extremity LAC/Harbor-UCLA Med Center
Average of $32,021.50 over 12 discharged patients
Garfield Medical Center
Average of $146,429.20 over 15 procedures
Heart failure & shock with major complications Kaiser Foundation Hospital - Panorama City
Average of $17,390.58 over 19 discharged patients
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