By Consumers For Quality Care, on March 12, 2021
According to the Wall Street Journal, a rule that requires hospitals to make their prices public is showing how widely prices can vary, even for the same procedure at the same facility.
The industry sued to block the rule, and it’s become apparent why. At the Van Ness location of Sutter Health’s California Pacific Medical Center, for example, a caesarean section can range in price from $6,241 to as much $60,584, depending on if the woman receiving the procedure is part of a local health plan that serves Medicaid recipients or if she is insured, but the hospital is out of network.
“It is shining a light on the insanity of U.S. healthcare pricing,” said Niall Brennan, chief executive of the Health Care Cost Institute, a nonprofit that analyzes medical costs. “It’s at the center of the affordability crisis in American healthcare.”
Unlike almost all other industries, hospitals often operate without knowing the cost of procedures. Instead, they set prices based on targets for overall margins and according to what the market will pay. Margins are often boosted by charging commercial insurers more, ultimately driving up the cost of health care in the entire market.
Some large hospital operators – such as CommonSpirit Health, HCA Healthcare Inc., Mayo Clinic, and New York-Presbyterian – have yet to release their prices. Others have already said they will not publish their rates and will pay the $300 a day per hospital fine.
Alan Muney, a former Cigna Corp. executive, suggested Sutter Health’s price discrepancies weren’t an outlier.
“This is probably typical of what you’re going to see across big delivery systems,” he said.