Real Cost of Hospital Procedures

A few weeks ago I posted a description of an article in TIME magazine by Steven Brill, “Bitter Pill – Why Medical Bills Are Killing Us,” (

In the May 20, 2013 issue of TIME at page 17, Brill announces the release of a list of the “chargemaster” prices for the most common inpatient services in all U.S. hospitals in 2011 and contrasts them with what Medicare pays.  Surprise!  Medicare pays less – far less.

Brill writes that the huge data file released by Health and Human Services (HHS) Secretary Kathleen Sebelius is a “…great first step toward a new transparency in health care costs….” for two reasons.   First, the file reveals the “vast disparity” between what hospitals charge and the real cost.  Second, the file shows most of the chargemaster prices are “wildly inconsistent.”


–  The Southeast Alabama Medical Center claimed an average chargemaster bill of $32,963; Medicare paid an average of $5,777.

–  Joint replacement procedures range from $5,300 in Ada, Oklahoma to $223,000 in Monterey Park, California.

The more than 163,072 lines of data (17,511 pages) originated in the HHS department called Centers for Medicare and Medicaid Services (CMS).

Finally, Brill wants HHS to “…publish chargemaster and Medicare pricing for the most frequent outpatient procedures and diagnostic tests at clinics….”  Even further, Brill writes that we should know what insurance companies pay.  What we do know is that insurance companies pay more than Medicare, but we don’t know how much more.

And aren’t hospitals supposed to be nonprofit?


One thought on “Real Cost of Hospital Procedures

  1. It is unconscionable how much hospitals, clinics and doctors can and do charge. It is clearly a lack of information that allows this to happen. Charging $5,000 and $220,000 for the procedure should make health providers ashamed.


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