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Hospital price reports may help patients become better consumers of health care

Most people would agree that knowing how much an item costs is important in making intelligent purchasing decisions. But how much hospitals charge for their services has long been a mystery for consumers.

The federal government has started to lift that veil and begin to share pricing information. Because of that change, wary patients will at least be armed with more information. When it comes to choosing a health care provider, the bottom line is seldom the driving force, especially if consumers are insulated from the true cost of care by insurance. But more light on hospital pricing may very well result in more-competitive charges.

For the second year in a row, the agency that oversees Medicare is sharing a sea of data on how much 3,376 hospitals across the country charged Medicare and how much the program paid for 100 different procedures. This is the third time in 14 months the Centers for Medicare and Medicaid Services has made public such reams of pricing data.

As Dr. Nancy H. Nielsen, a senior associate dean at the University at Buffalo’s School of Medicine and Biomedical Sciences, noted in The News recently, the information released by CMS included such startling nuggets as the ophthalmologist in Florida “who had chosen to use the very expensive drug to treat macular degeneration instead of the cheaper drug, made by the same company, which works just as well.”

A Buffalo News analysis of the current CMS report found hospitals in Western New York have lower sticker prices for the most common procedures, when compared to hospitals in other parts of the country. However, this region’s hospitals are much closer to the national average when comparing how much Medicare actually paid the hospitals for the procedures. The CMS report showed that even within the region, the average sticker price for the most commonly performed procedures varies considerably.

An example in the story by News business reporter Stephen T. Watson cited the treatment of sepsis, a severe blood infection. One hospital charged $35,000, while another charged $8,100.

The latest data is from 2012. Coupled with the statistics released earlier covering 2011, experts can begin to make year-over-year comparisons and spot trends in hospital charges. The short period covered by the information makes it difficult to draw firm conclusions yet. Over time, however, the importance of the information will increase.

Meantime, it is worth noting a few facts. Few people, if any, pay full price for hospital care. Medicare and private insurers negotiate much lower rates for their members. People who don’t have insurance typically receive a discount on their hospital bills.

That is hardly surprising, but the new data is still worthwhile. The government effort to bring more transparency to the health care market could result in patients making more-informed, and possibly less-expensive, decisions about their treatment.

The focus on hospital prices comes as the cost of health care continues to spiral, by an expected 5.8 percent per year over the decade between 2012 and 2022. Time will tell whether the government’s strategy has any affect on costs. For now, at least consumers are armed with more information.