Pricing Out Medicare
Will unveiling the expense of care help cut costs?
Medicare paid hospitals more than $35,000 on average in 2005 to insert a heart defibrillator; an uncomplicated spinal fusion ran nearly $17,000--not including physician and various other charges. How will Americans react to knowing such numbers? With heightened appreciation for the escalating cost of medical care, the Centers for Medicare and Medicaid Services hopes.
Last week, to sensitize consumers to the need to rein in costs, CMS revealed its latest reimbursements for more than 40 inpatient conditions and procedures, from chronic lung disease to intestinal surgery (cms.hhs.gov/healthcareconinit). Adjustments for local variations in wage levels and other factors create a wide payment range--$30,151 to $41,193 for heart valve surgery, for instance. A bonus: The number of cases per hospital is included, so consumers can quickly weed out low-volume centers.
For now, making prices public is primarily a consciousness-raising exercise, says CMS official Herb Kuhn, because hospitalized Medicare patients don't pay a percentage of the cost and wouldn't benefit from lower prices. But Medicare outpatients have to shoulder a 20 percent copay and might shop for cheaper care if and when prices for their procedures are posted. That, at least, is the eventual goal.
This story appears in the June 12, 2006 print edition of U.S. News & World Report.
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