Calling for more transparency in hospital pricing, a study released Thursday spotlighted wide disparities in the cost of surgeries statewide.
The charges for common procedures such as hip replacements and spinal surgery were 20 percent more than the statewide median at hospitals in the Northern San Joaquin Valley, but were substantially lower than prices for the same surgeries in Bay Area counties.
The California Public Interest Research Group, or CalPIRG, researched the variations in surgery prices and reported its findings last week.
As health care costs continue to escalate, the study's results offer a glimpse into the erratic and mysterious nature of hospital pricing, say its authors. It underscores the need to get medical spending under control if overall health care costs are to drop as envisioned by the federal health care overhaul.
Californians spent an average of $6,238 each on health care in 2009, 70 percent higher than 10 years earlier, the study said. From 2001 to 2009, insurance premiums for California families rose by 113 percent.
Some differences in regional pricing were hard to explain. The surgery charges were highest in Alameda and San Mateo counties in the Bay Area, more than 160 percent of the state median, and lowest in the Fresno area, about 60 percent of the state average.
In the Sacramento region, the charge for a typical patient having a laparoscopic hysterectomy was $47,500, compared with $34,400 for a patient in Orange County and $55,000 in Stanislaus County. The cost of that same procedure in Contra Costa County soared to $83,172.
For angioplasty, Sacramento region hospitals charged an average of $85,520, while Bakersfield hospitals charged $44,000 and Modesto hospitals charged $111,550. In San Jose, the price was $144,922.
The charges varied among the hospitals considered in Stanislaus, Tuol-umne and Merced counties. A knee replacement charged for a typical patient was $99,775 at Sonora Regional Medical Center, far more than the cost for the same surgery at Oak Valley Hospital in Oakdale ($74,876) and Mercy Medical Center ($65,553).
Mike Strasser, vice president and chief financial officer for Mercy Medical Center, said the hospital doesn't price at an individual level. The hospital's pricing is at or less than the average for the region, he said.
Many factors
Mercy gets global numbers from the government, such as from Medicare databases, to see how other facilities do pricing, Strasser said. Hospital officials then look at other variables such as length of stay, age of the patient and whether the patient had a particular underlying condition, to determine their pricing.
"That's one of the reasons that's difficult to compare and contrast," he said. "There's so many variables involved."
Mercy has more than 8,000 different charges that were used in the past year, he said. "They all go into a particular procedure," he said.
Doctors Medical Center of Modesto charged $45,874 for Cesarean sections; the price for that procedure was $26,428 at Emanuel Medical Center in Turlock, $26,359 at Memorial Medical Center of Modesto and $32,129 at Mercy in Merced.
Even the report's authors admitted to being baffled by the huge differences in what hospitals charge for the same procedure.
"It's actually our point that they should also report what they get paid, not just what they charge, so we know how much things cost," said Pedro Morillas, legislative director of CalPIRG.
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