Why do hospitals bill some patients so much more than others for the same service? A look inside the numbers.
To understand what this means for patients, the Journal looked at one of the most commonly used hospital services, what’s called a level-four emergency-room visit—urgent but not life-threatening. The analysis focused on the amount billed by a hospital for the visit itself, not including procedures such as imaging scans or charges by doctors, which generally add to the total cost.Meet “Alex,” our hypothetical patient.
If Alex had been on Medicare, the price for that same Massachusetts General ER visit would have been just $422, according to calculations by Turquoise Health Co. The federal program aims for rates that cover hospitals’ costs without a big profit. Hospitals routinely get far more from private plans like Alex’s. This kind of gap is drawing close scrutiny. The Massachusetts Health Policy Commission, a state agency, says rising hospital prices are a major driver of increased healthcare spending.
It’s not clear that patients or employers are getting what they pay for. In the case of Alex’s ER visit, Massachusetts General had the highest quality rating from the Medicare program, with five stars. But so did Mount Auburn Hospital, where the price of Alex’s ER visit would have been $467—less than half the rate at the high-profile academic center. Medicare ratings look broadly at areas like mortality and safety across an entire hospital, not specifically ERs.
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