In Oakland, Alameda County Medical Center charged an average of $19,855 for a patient with seizures in 2011, while Alta Bates Summit Medical Center – less than 4 miles away in the same city – billed $48,923 to treat the same condition.
Marin General Hospital in Greenbrae charged $110,394 for patients with drug poisoning, while at Peninsula Medical Center in Burlingame, the average bill for those patients came to $34,759.
The Medicare data, released for the first time Wednesday by the federal government, shows the startling variations between what hospitals – even in relatively small geographic areas – charge the government program for the elderly and disabled for the 100 most common inpatient procedures.
"Hospitals are allowed to charge what they want, so this is the consequence of the lack of regulation or any real system," said Dr. Renee Hsia, an assistant professor of emergency medicine at UCSF who studies variation in hospital prices. "Just being able to see there is quite a bit of dysfunction in the hospital pricing market means this is an area where we have a lot of room to improve."
The figures also demonstrate that in the Byzantine world of hospital pricing, what hospitals charge has almost no relation to what the procedure costs and nothing to do with what they are eventually paid by government programs like Medicare, private insurers or individuals.
Few pay sticker price
Few people other than the uninsured actually get charged the sticker price because most people have coverage. Private insurers and the government negotiate with hospitals for how much the hospitals will get back for the care they provide. There are vast discrepancies between the charges and what hospitals are actually paid.
Advocates who favor transparency in health care say the release of the federal information is important because it draws attention to health prices, of which consumers are increasingly shouldering a bigger portion.
"If you get a hospital bill, depending on who you are, you could literally see a thousand percent difference," said Jamie Court, president of Consumer Watchdog, ,a consumer group in Santa Monica. "If that happened in a hotel, they'd be out of business."
The database, released by the U.S. Centers for Medicare and Medicaid Services, covers claims made in 2011 at more than 3,300 hospitals around the U.S., including the nearly 400 acute-care hospitals in California.
Overall, the data showed California's hospitals charged some of the highest prices in the nation. But health experts argued that the state's overall health costs are generally lower than the national average. That's mainly because many people are covered by health maintenance organizations, such as Kaiser Permanente, that tightly control their costs, and because Californians tend to use fewer hospital services.
Hospital charges within the state also varied widely. For respiratory problems that required ventilator support for more than four days, the low charge was $96,768 at Citrus Valley Medical Center's campus in Covina Los Angeles County. The high was at Stanford Hospital, which charged $929,119.
Billings, payments vary
But when it came to what hospitals billed and how much they actually got paid, those numbers were often very far apart.
For major small and large bowel procedures, Washington Hospital in Fremont charged an average of $462,920, but received an average of $65,619 in payments from Medicare. At St. Rose Hospital in Hayward, the average bill for treating complicated respiratory infections and inflammations was $193,382, while the average reimbursement was $25,985.
Hospital officials described the Medicare figures as irrelevant. They noted the data do not include information on the hospital's quality or medical outcomes ,and argued it will only confuse consumers.
"We acknowledge the whole system of hospital charges makes no sense," said Jan Emerson-Shea, spokeswoman for the California Hospital Association, the state's hospital trade group. She said hospitals list their charges only because they are required to by the federal government.
She also argued the Medicare data are less important to Californians because state law already requires hospitals to allow consumers to see their charges and publish their prices for 25 common procedures. Another state law mandates hospitals give low-income patients free or discounted care.
But patient advocates argued that higher-income uninsured people don't qualify for discounted care and that the 25 procedures can be selected by each hospital so they are not easily comparable with other hospitals.
Maribeth Shannon, of the California HealthCare Foundation, said the release of the Medicare data is just a start.
Shannon, who directs the Oakland health philanthropy's market and policy monitor program, said consumers should also know what hospitals are paid by private insurers in order to make decisions that could potentially lower their health care costs.
"Transparency is good and it's important for people to think about health care prices and how they vary," she said. "But to make real choices, they need more specific information."
See the charges
· The federal data on hospital charges can be viewed at the U.S. Centers for Medicare and Medicaid Services' website: http://go.cms.gov/16WaMfH