Study Finds Some Hospitals Marking Up Procedure Prices by 1,000%

Two California hospitals are among the 50 U.S. facilities that charge more than 10 times the cost of performing a procedure, according to a study published Monday in Health Affairs, the AP/Sacramento Bee reports (AP/Sacramento Bee, 6/8).

Details of Study

For the study, researchers at Washington and Lee University and Johns Hopkins Bloomberg School of Public Health compared hospitals' chargemasters with the estimated costs of procedures, which they determined based on the costs that Medicare would permit for a procedure (Sherman, "Moneywatch," CBS News, 6/8). To do so, they used government data for more than 4,000 Medicare-certified hospitals (Begley, Reuters, 6/8). The data were from May 2012 to April 2013 (Sun, Washington Post, 6/8).

The researchers determined that the average markup for a procedure was 340% ("Moneywatch," CBS News, 6/8).

However, the researchers found that chargemasters varied significantly by hospital. At the 50 hospitals with the largest markups, the average markup was 1,010% (Reuters, 6/8). All but one of those hospitals are for-profit facilities (Washington Post, 6/8).

California Findings

The highest-charging hospitals were spread across 13 states, including California (Gold, "Shots," Kaiser Health News/NPR, 6/9).

The two California hospitals among the top 50 were:

• Doctors Hospital of Manteca, which ranked 29th; and
• Doctors Medical Center in Modesto, which ranked 30th (AP/Sacramento Bee, 6/8).

The researchers noted that California is one of just two states with laws that require for-profit hospitals to offer price discounts to eligible patients ("Shots," Kaiser Health News/NPR, 6/9).