Through the Looking Glass

Alice found a Wonderland.

What we found last week, when the Center for Medicare & Medicaid Services (CMS) released cost information for the 100 most common diagnoses and procedures in over 3,000  hospitals, is beyond Alice’s imagination. Some of the cost differences for the identical billing diagnoses qualify for “you cannot make this stuff up.”

Two examples:

  • Joint replacement in Ada, Okla.: $38,000; in Monterey Park, Calif.: $223,000
  • Severe sepsis with mechanical ventilation for more than 96 hours: Bronx Lebanon Hospital in New York City, $38,000; Stanford Hospital, Stanford, Calif.: $637,000

Jonathan Blum, deputy administrator and director of the Center of Medicare at CMS, stated that making this information available to the public at no charge will put pressure on expensive hospitals. But will it?

Though CMS has the clout to make cost information available to the public, the average consumer has great difficulty finding out the cost of medical services, procedures, tests. A physician colleague who gave hospital grand rounds recently described his own significant challenge as he attempted to find the cost of hospital imaging and of an outpatient procedure for a family member.

The underinsured and uninsured are most vulnerable to excess list prices. That said, these astounding — and unsupportable — charge differentials demonstrate one of the key factors that the readership of Managed Care recognizes to be contributing to our broken health care system.

CMS has given us some ammunition in the battle for price and charge transparency in health care services. Let’s advance the campaign and reflect more clearly through the looking glass.

(Note: The author holds a position with a New Jersey health plan.)