NEWS2U Health & Wellness
Living Healthy in an Unhealthy World

Sunday, June 04, 2006

U.S. Medicare reveals hospital procedure prices

Reuters Health online

CHICAGO (Reuters) - The U.S. government, the biggest purchaser of health care, began on Thursday to post the prices Medicare pays hospitals for common procedures like heart surgeries and knee replacements, in an effort to cast light on the price and quality of health care.

The U.S. Centers for Medicare and Medicaid Services, which runs the Medicare health program for over 43 million elderly and disabled people, is posting the average price Medicare pays for 30 common elective procedures broken down by county.

Health care costs are generally opaque in the United States, in part because intermediaries like health insurers and employers finance much of the system for patients. Experts have said Americans know more about the quality and pricing of their cars than their health care.

"People generally don't have a clue what the health care they are consuming costs, nor do they have any means to be able to compare it to a national standard," Health and Human Services Secretary Mike Leavitt told a telephone briefing with reporters.

The new data is from Medicare rates for the fiscal year ended Sept. 30, 2005.

It shows, for example, that Medicare payments for hip and knee replacements in Broward County, Florida, ranged between $10,400 to $11,000 per procedure. The data also includes the volume of procedures at individual hospitals.

Volume can be an important indicator of quality as it suggests expertise, Mark McClellan, chief of the Medicare agency, said.

Health care costs in the U.S. have been rising several times the rate of general inflation, putting a strain on employers and patients who are footing more of the bill.

The average Medicare payment for surgery to insert a defibrillator, a medical device that shocks the heart back into normal rhythm, is about $35,000 nationally. Payments differ sometimes substantially, though, by state, according to the data.

For example, Medicare pays between $26,000 to $29,000 in Arkansas, but between $33,000 to $44,000 in California.

The effort toward transparency in health care seeks to arm patients with cost and quality information so they make smarter choices, to spur higher quality through competition among providers.

Although the information is provided about Medicare payments, officials said it could help spur better prices for other payers.

"Certainly it's a reference point that people might use to get care that they need at a lower cost," McClellan said.

Other procedures listed include spinal fusion surgeries, gallbladder removal, prostate removal and kidney and urinary tract operations.