Kansas City and Indianapolis residents with private health plans face some of the widest disparities in U.S. hospital costs, often being charged twice as much as nearby facilities, a study found.
The highest-priced hospitals in 13 cities studied typically get 60 percent more for inpatient services than the lowest-priced hospitals in the same communities, and almost double for outpatient care, according to a study released Thursday by the Center for Studying Health System Change.
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Hospitals with more market power have greater muscle in negotiations with insurers and can extract higher prices, the group found.
The report looks at claims data for about 590,000 current and retired non-elderly autoworkers from Chrysler, Ford and General Motors and their families in selected urban areas, including in Missouri, Michigan, New York, Indiana and Ohio.
The report, which echoes earlier studies of health care pricing, was financed by the National Institute for Health Care Reform, a group set up as part of automotive industry union contracts.
Many patients are unaware of the prices that private insurance plans pay to medical providers. Scrutiny of costs is growing as the Affordable Care Act seeks to expand health coverage nationwide while lowering treatment costs. Health care spending in the U.S. reached almost $2.6 trillion in 2010, more than 10 times what was spent in 1980, according to the Kaiser Family Foundation.
“Some hospitals are getting paid four times what Medicare would pay,” said Chapin White, a senior health researcher at the Washington-based Center for Studying Health System Change and the lead study author. “Those high prices are a major contributor to premiums being as high as they are.”
The result is that average hospital prices for privately insured patients in the markets studied were 1.5 times Medicare rates for inpatient care and two times higher for outpatient care, according to the report. Hospitals in Youngstown, Ohio, and Flint, Mich., were lower priced relative to Medicare when it came to inpatient care. The higher-paid hospitals were in Kansas City, Indianapolis and Kokomo, Ind. Medicare is the U.S. health plan for the elderly and disabled.
Data released by the U.S. government in June also found that outpatient hospital prices vary, with hospitals in New York charging from $474 to $7,332 for a magnetic resonance imaging test. Information released by the Centers for Medicare and Medicaid Services in May also found hospitals charging prices that can be thousands of dollars different for the same medical procedures.