Charges for healthcare in the US are whack – UPDATED

New study in BMJ Open. “Variation in charges for 10 common blood tests in California hospitals: a cross-sectional analysis“:

Objectives: To determine the variation in charges for 10 common blood tests across California hospitals in 2011, and to analyse the hospital and market-level factors that may explain any observed variation.

Design, setting and participants: We conducted a cross-sectional analysis of the degree of charge variation between hospitals for 10 common blood tests using charge data reported by all non-federal California hospitals to the California Office of Statewide Health Planning and Development in 2011.

Outcome measures: Charges for 10 common blood tests at California hospitals during 2011.

The California Office of Statewide Health Planning and Development requires hospitals in the state to report the average charges for 25 common outpatient procedures each year. The hospitals can choose which tests to report, although the OSHPD gives them a recommended list of 10 good ones. This study reported on the charges for those ten tests. Depending on which specific ones were reported, they had data on 166-189 hospitals. Here are the results:


The horizontal line in the box is the average median. The bow contains the 25-75th percentiles. The lines at the top and bottom are the 5th and 95th percentile. The range is, to be frank, insane. A comprehensive metabolic panel, which is a really common test, cost, on average, $79 at one hospital and $948 at another. (UPDATE: Turns out this was the difference between the 5th and 95th percentile. They dropped the values above and below that. If you keep those outliers, the range was $35 to $7303). Can there possibly be a justification for that? Even the interquartile ranges for that test ranged $354.

For 7 of the 10 tests, teaching hospitals charged significantly lower amounts. For 5 of the 10 tests, government hospitals had significantly lower charges than non-profits. For 2 of the 10 tests, for-profit hospitals charged significantly more than non-profits.

Otherwise, for the most part, there’s just no explaining this. Except for the fact that our health care system is, at times, somewhat insane.


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