The Centers for Medicare and Medicaid Services dropped three more huge sets of data on Monday, releasing files that detail the amount hospitals billed and received for inpatient and outpatient services and what Medicare paid physicians in 2013—bringing the number of years for which such data is available up to three.
For hospitals, the picture largely remains the same: Big mark-ups and vast variation amongst providers.
The hospital data looks at 100 of the most common inpatient stays and the 30 most common outpatient procedures. The inpatient dataset covers 7 million discharges and $62 billion in Medicare funding—yet that still represents only a fraction of hospital charges. A Modern Healthcare analysis of 2011 data found that hospitals charged 380% more for inpatient services than what Medicare reimbursed, and 520% more for outpatient services—and the trend doesn't appear to have shifted significantly since.
The heat is on providers to start providing some transparency for their sticker prices. "[This data] is important for consumers, their providers, researchers and other stakeholders to understand the delivery of care and spending under the Medicare program," said acting CMS Administrator Andy Slavitt.
Hospitals claim that their charges are irrelevant at face value; their purpose is to serve as a point at which to begin negotiations with insurers.
"The chargemaster can be confusing because it's highly variable and generally not what a consumer would pay," Carol Steinberg, vice president at the American Hospital Association, told The Washington Post when the dataset was originally released last year. "Even an uninsured person isn't always paying the chargemaster rate."
But that explanation doesn't explain vast hospital-to-hospital variation. Why, for example, is the average charge for a major joint replacement at Lehigh Valley Hospital in Allentown, PA almost $120,000, when at Sacred Heart Hospital, also in Allentown, it's only $83,000? Geography doesn't seem to provide any clue—although population health might.
In its response to the physician data release, the American Medical Association points out that the dataset does not account for quality of care, and the same logic applies to the hospital data as well. Equally applicable to hospitals is the AMA's caution that the CMS data does not account for population health: "Without adjustments for differences in patients' health and socioeconomic status, physicians who treat the sickest and most disadvantaged patients will be wrongly labelled as outliers in public reports," the association wrote in a response on Monday.
The message this year, as last year, appears to be "wait and see." Although the pressure on providers is growing, genuine insight remains elusive.
Uptick in prices
What the new data does reveal is a steady, if modest, uptick in prices. Major joint replacement grew from $50,116 to $52,249—a rate of about 4%—from 2011 to 2012, and from $52,249 to $54,239—a rate of 3.8%—from 2012 to 2013, CMS notes.
Hospital payments in the dataset include the cost of care as well as other ancillary costs, like teaching subsidies to academic facilities and disproportionate share funds for safety nets.
Correction: A previous version of this story incorrectly stated that the average charge for a major joint replacement at Lehigh Valley Hospital in Allentown, PA is over $120,000.