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Why is the Cost of Giving Birth Inconsistent in the U.S.?

Why is the Cost of Giving Birth Inconsistent in the U.S.?

Written by Tara Culp-Ressler

Women giving birth in the United States without experiencing any medical complications can be charged anywhere between $3,296 and $37,227, according to a new study conducted by researchers at the University of California at San Francisco. And the dramatically different pricing at different hospitals doesn’t lend itself to any kind of logic.

Researchers studied about 100,000 births in California, and found that women having babies just a few miles apart could be charged prices that varied by more than $15,000. Institutional and market factors — like the hospital’s non-profit or for-profit status, whether the hospital incurs a lot of uncompensated costs by serving a large population of low-income patients, and the mother’s age and length of stay — only explained about a third of the price fluctuations, according to researchers.

“The majority of the discrepancies couldn’t be explained and there was no consistent pattern,” Dr. Y. Hsia, an associate professor of emergency medicine and the lead author of the study, told ABC News.

That may seem like it would spur expectant parents to shop around a little bit and select a cheaper hospital, but Hsia noted that comparison shopping is virtually impossible. Doctors and other hospital staff typically have no idea what health services, including the care related to childbirth, will end up costing. Patients can’t know for sure what they’ll be expected to pay until they receive their bill.

Other data in this area has drawn similar conclusions. As a whole, Americans medical bills are random, and a lack of price transparency in the industry prevents people from realizing when they’re patronizing one of the most expensive hospitals in the country. A recent analysis in the New York Times found that giving birth in America costs more than anywhere else in the world, although that doesn’t translate to better quality of care. In fact, U.S. hospital prices are simply artificially high, sometimes charging patients up to ten times more than the actual price of the services they’re receiving.

That’s contributed to the fact that one in three Americans skip out on medical care because it’s just too expensive — and that’s why Hsia and her fellow researchers were interested in delving into this topic in the first place.

“Recently, hospital charges have come to the forefront of political, popular and medical discourse due to their inexplicable magnitude and devastating effects on specific patients,” they write. “While insurers typically negotiate lower reimbursements, these full, inflated charges are still billed to the 22 percent of American adults aged 19–64 who are uninsured and to privately insured patients receiving care out of network, contributing in large part to the 57 percent of US bankruptcies that result from medical bills.”

Although the new study focused specifically on California, Hsia believes the findings have implications for the rest of the country, too. “I am certain that this variation is not isolated to California,” she told Bloomberg News. “The only place where this might be different is certain states where they’re starting to put caps on spending like in Massachusetts.”

This post was originally published in ThinkProgress

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Photo Credit: Thinkstock

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91 comments

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4:10AM PST on Jan 22, 2014

Simple, 3rd party payer. Neither you or your doctor are footing the bill so cost is not a factor like it normally would be. And it's not just giving birth, this applies to all medical procedures.

4:51PM PST on Jan 21, 2014

Why do we YOU need universal health care?
BS. government control is so wwrong

4:45PM PST on Jan 21, 2014

how much did it cost the girl to give birth in her home?

6:50AM PST on Jan 21, 2014

The insurance companies have inflated the prices, because they give the hospitals/doctors so little. They really are the problem. They may have addressed another problem, but seem to have created a bigger one. The really sad thing is when the hospital will accept the tiny amount they receive from the insurance company, but then force the uninsured to pay for the inflated price.

1:58PM PST on Jan 20, 2014

one price for all procedures regardless of what hospital you use. thanks for sharing

1:42PM PST on Jan 20, 2014

Julie: The ACA does have provisions that are already containing costs, even though they are not in effect yest, because doctors and hospitals know they have to adjust practices in order to get paid. Premature discharges that guarantee bounceback readmissions (admissions are lucrative because they involve a lot of paperwork) are no longer going to be paid for, for instance. Compensation for iatrogenic problems, like hospital acquired infections, for instance, are being greatly curtailed or eliminated.

What we need to do is shift from fee for service to outcome based payments. The current system rewards doctors for throwing everything at the wall, much of which they know is unnecessary - they justify excessive testing or procedures by claiming that they are protecting themselves from lawsuits, but they know it also boosts their paydays. Medicare is looking at best practice for some diagnoses, which is important. "Medicine is just as much an art as a science" is a little too true. Where you did your residency too often determines how you treat a given condition; we need to increase the science and decrease the art.

1:41PM PST on Jan 20, 2014

We need Universal Health Care in the US. Its time to stop the greed dead in it's tracks and put the needs of people first.

9:34AM PST on Jan 20, 2014

This morning on TV there was an article about Henry Ford Hospital in Detroit. It was designed by the same people as the Ritz Carlton hotels. This in Detroit where vacant homes are being burned, pets abandoned to die in vacant homes & thousands jobless. Does anyone think such folks can avail themselves of such services in a for profit system? I wouldn't care if my hospital was 100 years old if my costs were covered (or at least reasonable) & the care was good. The US system is totally out of control, its priorities skewed & absolutely out of touch as far as accessibility for those desperately in need. Smarten up & get rid of the insurance company gougers. They don't care if you live or die. THOSE are your real death panels!

8:19AM PST on Jan 20, 2014

This is because as of yet there has been no reform regarding the cost of services rendered and it is pretty much a free for all. This is a crucial part of the equation of the problem of the insanely high cost of health care. Some insurance companies have made contracts with healthcare providers limiting the amount they agree to pay for any given service. However until Obamacare those same insurance companies were free to charge as much as they liked for "administrative costs". At least Obamacare has now put a limit on that. But there is still so much work to do to create some rules and regulations and reform to the cost of services rendered and also to the cost of pharmaceutical drugs as well, another part of the equation of the ridiculously high cost s of healthcare. There is still a LOT of work and reform that needs to be done.

9:45PM PST on Jan 19, 2014

There is something very wrong with the idea of for-profit hospitals and healthcare. It is darn near impossible to get any idea of where to go for the best price for MRIs, operations, or childbirth. I bought a knee brace after an auto accident. Later, my attorney gave me a detailed list of every charge my insurance company paid for my hospitalization and care during my recovery. The insurance company paid the brace company LESS than they charged me as my copay.

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