New research shows the cost of delivering a baby can vary from around $3,300 to more than 10 times that amount, depending on the hospital. Researchers at the University of California—San Francisco discovered the disparity after they analyzed the cost of giving birth for more than 100,000 privately insured women at roughly 200 California hospitals.
"Finances are a huge issue to patients, and I see this every day as an emergency physician," said Dr. Renee Hsia, an associate professor of emergency medicine at UCSF and the lead author of the study,
Hsia said she often sees patients who say they are terrified of unpredictable hospitals bills they might incur for even a simple visit.
"Unlike other industries, the way health care is priced and paid for is notoriously opaque, making it difficult for patients to act as educated, price-comparing consumers," the study said.
Most hospitals use a price list called a "chargemaster" to bill their services. There is no uniform system that dictates what the prices on the chargemasters should be and hospitals can increase these rates annually or even more frequently at their discretion, Hsia says.
The cost of all medical care in the U.S. has received a great deal of scrutiny in the last few years with the implementation of the Affordable Care Act. Americans spend $2.7 trillion a year on health care, and on some health measures, the U.S. still lags behind the developed world. America has the highest mortality rate of any industrialized country, according to UPI.
Hsia, who works at the San Francisco General Hospital & Trauma Center, stresses that hospitals and their employees should be paid for the care they deliver. Still, she wanted to understand why a person might pay one amount for a procedure at one hospital, while another could receive the same care at a fraction of the price only a town or a street away.
Using the most common hospitalization event – child birth – as their litmus test, Hsia and her colleagues sought to examine the differences in costs of care across almost 200 hospitals. They used the California Office of Statewide Health Planning and Development as their data source.
After analyzing 110,000 women's cases, researchers found that for an "uncomplicated vaginal delivery" women were charged from $3,296 to $37,227. A delivery is considered uncomplicated when it doesn't require the doctor to induce birth or use any surgical interventions. The amount hospitals billed for C-sections ranged from $8,312 to $71,000.
"Without adjusting for patient characteristics, the hospital with the highest charges would charge about 13 times more than the hospital with the lowest charges for vaginal births, and about 9 times more than the hospital with the lowest charges for caesarean sections," said the study.
To determine the reason for these drastically different prices, researchers then looked at the characteristics of the hospitals, such as their location and corporation status. For-profit hospitals and those located in areas with higher costs of living, as well as hospitals receiving more seriously ill patients, charged significantly more than others but not enough to explain the broad difference in costs.
The researchers then used a unique scientific model to control for variables that could impact the price of services, such as the cost of living or the profit status of the hospital or the number of days a patient spent in the hospital.
After this adjustment, the highest hospital charge for vaginal births amounted to more than 11 times the lowest hosptial charge and more than 8.5 times the lowest charge for C-section births, the study said.
Hsia said what surprised her and the other researchers the most was how little the hospitals' characteristics and market-level factors played a role in the cost variation.
"In other words, we expected that hospitals that see sicker patients charge more, and that hospitals located in areas with a higher cost-of-living – and therefore have to pay higher wages – would charge more," Hsia said in an email. "But when we put all of those factors in the model, it only explained at most 36% of the variation in charges."