CMS Posts Medicare Price Data for 30 Common Procedures

The average prices that Medicare pays for 30 common elective procedures at hospitals are now listed on the program's Web site, CMS announced on Thursday, USA Today reports (Appleby, USA Today, 6/2).

The prices, which are based on Medicare payment rates for the fiscal year that ended Sept. 30, 2005, are listed as average ranges and sorted by county (AP/Albany Times Union, 6/2).

The Web site also includes information on the quantity of each of the 30 procedures specific hospitals performed in 2005. It does not contain hospital-specific cost information (USA Today, 6/2). According to the data, the most common procedure paid for by Medicare is the replacement of a hip or knee (AP/Albany Times Union, 6/2).

Nationwide, Medicare payments for hip or knee replacements ranged between $9,992 and $12,173 (USA Today graphic, 6/2). For heart valve surgery, Medicare paid an average of $38,528 (Austin, Denver Post, 6/2).

CMS Administrator Mark McClellan said, "There is a large variation in how much you pay for services if you go to different doctors or hospitals or providers. There's also significant variation in the quality of care you can get, so this is important information for anyone to pay attention to" (AP/Albany Times Union, 6/2).

HHS Secretary Mike Leavitt said, "Once people gain better information, they become better consumers of health care, and that helps get health care costs down and quality of care up" (Wall Street Journal, 6/2). Leavitt said that "by taking steps to post prices and quality data," the federal government "hope[s] to encourage more insurance companies, hospitals, clinics and doctors to do the same" (AP/Albany Times Union, 6/2).

He added, "Our ultimate vision is that patients will be able to compare hospitals and physicians on cost, quality and consumer satisfaction." Leavitt also said the data could be useful to the uninsured in negotiating prices with hospitals (USA Today, 6/2).

Medicare typically pays the same rate to hospitals within geographic regions, the Wall Street Journal reports. It is "unclear how the new information will help individuals navigate the complex hospital payment systems," according to the Journal (Wall Street Journal, 6/2).

According to USA Today, the new data "won't be useful to most consumers" because the information is listed as an average range of what Medicare pays in a county, "not what those with private insurance or the uninsured might pay." The usefulness of the new information also might be limited because it does not show hospital-specific prices or the costs for individuals, "although savvy beneficiaries could estimate based on the program's typical copayments and deductibles," USA Today reports.

The information on the number of procedures performed at a specific hospital could be significant because studies show that "the more experience a facility has with a procedure, the better the outcome for the patient," according to USA Today (USA Today, 6/2).

Tom Nickels, senior vice president of government relations at the American Hospital Association, said the information is "worth looking at, but it doesn't supplant the need to know what your co-insurance obligation is." He said the federal government should focus on helping the uninsured obtain coverage rather than negotiating procedure costs (AP/Albany Times Union, 6/2).

Peter Lee, CEO of the Pacific Business Group on Health, said, "The days of medical costs and the difference in health care quality being invisible to consumers are over" (USA Today, 6/2).

Craig Keyes, CEO of UnitedHealthcare of Colorado -- which is providing pricing and patient outcome information to doctors in the state as part of a pilot program -- said, "There have always been a lot of secrets in health care, and this is part of bringing that out of the black box" (Denver Post, 6/2).

The Business Roundtable said, "Unfortunately, today's consumer is completely unaware of the cost of their health care until they receive a bill in the mail. By making cost information available, consumers will be better informed on pricing and better able to make educated health care decisions" (AP/Albany Times Union, 6/2).

The new Medicare data are available online.