It's always been nearly impossible to compare prices between hospitals. For one, most people who find themselves in an emergency room don't have the leisure to shop around. Even if they do, where are they going to turn? Healthcare providers don't typically put their prices on billboards. The opacity of pricing is one of the many, many reasons the health-care market is broken and Medical City can charge D Editor Tim Rogers $7,600 for a cookie.
The Obama administration took a significant step toward making the market more rational. Last week, it released a humongous spreadsheet listing the "chargemaster" prices that every single hospital in the country bills Medicare for each of 100 common inpatient procedures.
As Steven Brill noted in Time, Medicare basically ignores this number, then uses expense data provided by the hospital to decide how much it pays. For instance, Medical City bills the government $76,125 to treat a patient suffering from kidney failure with major complications. What Medicare actually pays is $12,836.
Private insurers, and especially the millions of Americans who lack health coverage, do not bargain from a position of such strength. Insurance companies negotiate discounts off the chargemaster price, but still invariably pay more than Medicare. The uninsured are lucky to escape from the ER with their shirt still on.
That's all well and good, but by now you're probably wondering where to go for that large and small bowel procedure that results in major complications -- the most expensive inpatient procedure listed in the government data.
And if you have kidney failure?
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And what about a drug overdose?
Notice a pattern? For pretty much every single procedure, Medical City tops the list. Baylor is a relative bargain.
Hospitals contend that no one really pays these charges. "Government programs like Medicare and Medicaid determine how much they reimburse hospitals," Medical City told The Dallas Morning News in a prepared statement. "Insurance plans negotiate their payments. Everyone else is eligible for our charity care program, or they receive Medical City's uninsured discounts, which are similar to the discounts a private insurance plan gets."
Then why bill people for such insanely inflated amounts? The short answer is because they can. The longer answer is that the system's broken. The newly released data won't fix it and probably won't do much to change people's behavior, but they do nudge hospitals in the general direction of a rational pricing system.