It's Official: Hospital Bills Make No Sense

$5K for a procedure in one hospital costs $223K in another
By Ruth Brown,  Newser Staff
Posted May 8, 2013 9:55 AM CDT
It's Official: Hospital Bills Make No Sense

The charges on US hospital bills often seem entirely random and inconsistent, and now we know why: they probably are. The government has released data today on what 3,300 different hospitals charge for the 100 most common procedures. The results show massive variation, reports the Washington Post. One DC hospital charges $115,000 to put a patient on a ventilator, while another in the same city charges $53,000. Nationwide it's even crazier: $5,304 for a joint replacement at one hospital in Oklahoma compared with $223,373 for one in California.

Some hospitals cited in the data say their bills are higher because they're teaching hospitals or have a sicker and older patient base, the New York Times reports. But a Medicare official says the variation is still too large to fully account for the discrepancy. As Time thoroughly exposed earlier this year, charges for different procedures are set by a hospital master list called a "chargemaster," which are wildly inconsistent across different hospitals and often bear little resemblance to what Medicare says are their true costs. "If you’re charging 10% more or 20% more than what it costs to deliver the service, that’s an acceptable profit margin," says a hospital finance expert. "Charging 400 percent more than what it costs has no rational basis in it at all." (More health care stories.)

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