New York State has pulled back the curtain on hospital charges with a showing what each hospital charges for 1,400 different procedures.
The differences can be dramatic: At Bellevue Hospital, the median charge for an 聽is $6,330, and at NYU Langone Medical Center next door, the median charge is $12,222. 聽Lutheran Medical Center in Sunset Park, Brooklyn, typically charges $5,686 and Maimonides Medical Center, a dozen miles away, $14,763.
Bellevue Hospital and NYU Medical Center are adjacent and work closely together, but charge widely different prices (Photo by Fred Mogul/WNYC).
Patterns can be difficult to discern, and can vary from procedure to procedure. Overall, academic medical centers are more costly because of the additional staff needed for medical training, the greater use of technology, and the severity and complexity of patients. But those factors do not account for why at Westchester Medical Center,聽the median charge for a vaginal delivery is $22,143, and at New York Presbyterian Weill Cornell Medical Center, it is $11,900.
The said the information is 鈥渃omplex and can be confusing,鈥� because 鈥渉ospital charges do聽not reflect the far lower payments hospitals actually receive for the services they provide.鈥� Medicare and Medicaid reimburse聽much less than what hospitals charge, and insurers and managed care companies also negotiate rates that have little to do with what hospitals ask to be paid.
People without insurance, however, are subject to these sticker prices. In practice, hospitals typically work out some kind of payment plan less than the charged amount and write off losses 鈥� but the payments can still be onerous.
Dr. Fred Hyde, from Columbia University鈥檚 , said the relationship between charges and underlying costs is tenuous at best.
鈥淭o a large extent in the hospital field, we take our charges in accord with what we think we鈥檙e going to be paid, not in any relationship to the cost of goods sold or the combination of wages and materials, or anything else that would go into a genuine cost measurement,鈥� said Hyde, a physician who has been the head of two hospitals and a managed care company.
Experts say patients trying to evaluate potential hospital charges for upcoming treatments should use the state database cautiously, if at all, because the charges listed are likely to be only loosely connected to the prices a patient will see. Instead, patients should try to get information about their out-of-pocket expenses in advance from the hospital and insurance carrier 鈥� though in practice that can be difficult, if not impossible.
Making medical costs more transparent is a goal for both consumers and the institutions that pay for most medical treatment, insurance companies and the federal government.
Suzanne Delbanco, from the , said New York and the rest of the country should look to New Hampshire as a model. Its state website allows consumers to plug in their insurance plan, hospital and procedure, and get an accurate projection of real out-of-pocket costs.
Delbanco said New York鈥檚 new database 鈥渋s a good step, but a baby step鈥� toward greater transparency.
In the meantime, she said, people should avoid falling into the trap of assuming places that charge more provide better care.
鈥淐ountless studies have looked at the relationship between cost and quality,鈥� Delbanco said. 鈥淎nd the relationship just isn鈥檛 there.鈥�
James Tallon, from the United Hospital Fund, said he hopes the newly released data will illuminate the true underlying costs of medical procedures and the wide variations in charges 鈥� perhaps eventually making the case for a return to stronger price controls that were in place, before deregulation in the 1980s.
鈥淭hat鈥檚 an open political question 鈥� we鈥檙e nowhere near that now,鈥� Tallon said, noting that New York 鈥渟ome three decades ago felt it perfectly reasonable public policy to standardize all these rate-setting decisions.鈥�
This story is part of a reporting partnership that includes WNYC, NPR and Kaiser Health News.