A Modern Healthcare analysis of Medicare inpatient charge data released earlier this week found there are vast disparities in hospital charges, or list prices, for similar treatments at hospitals in the same area, and those spreads vary dramatically from market to market. The analysis showed that the widest gulf between the highest charging and lowest charging hospitals in 2013 was in Philadelphia, where the average difference in average hospital charges across all procedures was $123,847. Los Angeles and Newark, N.J. came in second and third. The analysis is based on data the CMS posted that shows the charges hospitals submitted to Medicare for the 100 most commonly billed DRGs (diagnosis related groups). Analysts looked at the average difference between the highest and lowest average charges billed for the 100 most popular DRGs for each Hospital Referral Region.
Read more: An interactive map at ModernHealthcare.com gives a national perspective on these disparities, showing that in general, areas of higher population density (with more hospitals) have higher variations in costs. The presence of higher-cost academic medical centers in an area may also be a factor.