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What's it cost to have a baby in a hospital in California? Anywhere between $3,000 and $37,000, researchers found.
They could find no logical explanation for the huge variation in costs, and say their study, published in the journal BMJ Open, helps illustrate why health care is so expensive in the United States.
“Even after adjusting for patient characteristics like their length of stay and their age and even adjusting for hospital characteristics and things like the cost of living, we found significant variations in price,” said Dr. Renee Hsia of the University of California, San Francisco, who led the study.
For a simple, uncomplicated vaginal delivery, prices ranged from $3,296 to $37,227, Hsia’s team found. For a C-section, women were billed between $8,312 and nearly $71,000.
"This is, unfortunately, the appalling state of affairs of health care in the United States," Hsia said.
Even getting the prices wasn’t easy. Hsia’s team had to tease it out from state data on each patient admission. They figured out which ones were for childbirth, and then eliminated any complicated cases.
"Of course we would expect that if woman is in the hospital for six days as opposed to for two days, she would have larger charges,” Hsia said. “And if you deliver a baby in San Francisco, it will be more expensive than if you deliver in a cheaper suburban area.”
But the prices her team found — they are not naming individual hospitals — varied way more than these differences should account for.
The main problem is that patients do not know how much their insurers are paying on their behalf, and they certainly don’t know the price up front, Hsia says.
“This study shows that the market doesn’t take care of health care the way that we would like,” Hsia said in a telephone interview.
“If I go to buy a dozen eggs at the grocery store, I know if they are cage-free,” she added. “As a consumer, I know what I am buying and why there might be price differences. But as a patient, I don’t even know what things cost.”
Health experts say this is one of the main reason U.S. health care is so much more expensive than in other countries — $8,915 per person in 2012, for a total of $2.8 trillion. Of that, $882 billion is spent on hospitals services, like giving birth.
In May, the federal government said it would start publishing data on hospital charges. Their first numbers confirmed what health reform advocates complained about for years: The charges vary enormously, and for seemingly unclear reasons.
The Obama administration hopes that publishing prices will help force health care providers to be more consistent in their billing.
Last year, a team of researchers at at the University of Iowa compared the prices of hip replacements at hospitals across the United States. Prices ranged from $11,100 to $125,798, they reported in the Journal of the American Medical Association publication JAMA Internal Medicine.
“It is very common, not just in California, but in every state and every city around the country,” said Dr. Jeffrey Rice, a former physician and attorney in Nashville, Tenn., who set up a group called Healthcare Blue Book to help people compare prices.
Even within the same town or city, prices can vary by 200 percent or more for the very same procedure, Rice said.
“Every hospital gets to set their own prices. They get to negotiate their payment amounts with the insurance companies,” Rice said in a telephone interview.
Hsia said people shouldn’t think that price doesn’t matter if they have health insurance that covers it, Hsia said. “The way that it hits us eventually is our premiums,” Hsia said. “Seventy-five percent of health insurance increases are due entirely to medical costs. People might say ‘It doesn’t matter to me because I have insurance’. But it matters because this is why our premiums are getting so expensive.”
Rice says people should ask, even if they are not paying the bills directly.
“The number one thing consumers can do is ask about the cost of care before they get treatment,” he advises.
This may not be easy, he added. But consumers can take their business elsewhere. “If a provider won’t tell you what their price is, you probably don’t want to do business with that provider,” Rice said.