Study: Disparity in Hospital Pricing

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Fifteen of the state’s 20 least expensive hospitals are in Southern California — as well as some of the costliest, a study released Tuesday says, as reported in the Los Angeles Times.


An analysis of publicly available data found that the costliest hospitals — which include Cedars-Sinai Medical Center and Los Angeles County-USC Medical Center — were charging insurance carriers five times as much as the least expensive ones.


The study was commissioned by large health purchasers, including the California Public Employees’ Retirement System, the nation’s third-largest health benefits purchaser, and the Pacific Business Group on Health, which represents 50 large employers that spend $10 billion a year on healthcare for workers and retirees.


The study sponsors said they were troubled by the wide variations in hospital prices, based on 2005 data, and noted that the average charges of hospitals in the Sacramento region — where many CalPERS members reside — were 30% higher than the statewide average for the same mix of services.


“The report underscores what we have long suspected: that some hospitals are basing their prices to private insurers and patients on what they can get away with,” said Peter V. Lee, chief executive of the Pacific Business Group on Health.


Read the full L.A. Times story

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