By Cory Bilton
You don’t often get to pick the hospital you go to after being injured; you just go to the nearest one. This means that almost no one considers the price when choosing between hospitals. While the DC metropolitan area has many hospitals to choose from, it turns out that the cost of your care can be vastly different from one hospital to the next. Anecdotally, most of us might have already realized this. But last week, the Centers for Medicare & Medicaid Services (“CMS”) released pricing data on over 3,000 hospitals in the US, for the 100 most common inpatient procedures, allowing everyone to see just how greatly hospital prices differ.
In working with injured people, I see a lot of hospital bills. While a person injured because of someone else’s carelessness can make a claim or file a lawsuit against the wrongdoer to recover the cost of those bills, the legal process is not immediate. Usually the hospital bill is paid before the settlement, judgment, or verdict occurs (for those that have it, by your health insurer). Since almost all of our clients are affected by the prices that hospitals charge for treatment, I gave this CMS data a close look.
I started by narrowing down the list of hospitals to just those in the DC / Baltimore metropolitan area (I included most of Northern Virginia and the hospitals roughly in between DC and Baltimore). This brought the list down from 3,300 to just 50 hospitals. Not all hospitals in the area treat patients in all 100 of the most common diagnostic groups that CMS pays for. So next, I narrowed the list to only those diagnostic groups that all 50 hospitals treat. This got me down to 13 diagnostic groups that all 50 hospitals treat (so this way, I am comparing apples to apples). After that I added up the average cost of all 13 of those diagnostic groups for each hospital. Here are the results:
10 Most Expensive Hospitals in the DC Metro Area (Most expensive first)
- The George Washington University Hospital (DC)
- Georgetown University Hospital (DC)
- Howard University Hospital (DC)
- United Medical Center (DC)
- Washington Hospital Center (DC)
- Reston Hospital Center (VA)
- Sibley Memorial Hospital (DC)
- The Fauquier Hospital (VA)
- Providence Hospital (VA)
- Inova Alexandria Hospital (VA)
To put the differences in a slightly different context, the most expensive hospital in the area, George Washington University, charges roughly 4.5 times as much as the least expensive hospital in the area, Howard County General Hospital (in Columbia, MD; not to be confused with Howard University Hospital, which is the third most expensive in the area). If you show up to George Washington University Hospital with pneumonia, for example, you can expect to be billed $40,273 on average. At Howard County General Hospital, the same pneumonia would leave you with a bill of $8,605 on average, according to CMS’s data. Although some would argue there is a qualitative difference between the two hospitals, that’s a pretty enormous price difference.
Almost all the hospitals in the area are not-for-profit entities. However, there are two for-profit hospitals in the DC area. Not surprisingly, these two hospitals both ranked among the top ten most expensive. The George Washington University hospital, despite being associated with the university, is for-profit. Reston Hospital, in Virginia, is also a for-profit hospital. Not only were these two hospitals among the most expensive in the area, but for every dollar the hospital bills, Medicare pays only about $0.25; the lowest rate among area hospitals.
After looking over the list of local hospitals, I noticed something else interesting. When ranked by prices charged, all the DC and Virginia hospitals are near the top of the list (e.g. most expensive) and the bottom of the list is dominated by Maryland hospitals. It turns out that Maryland chose, in 1971, to set the prices at all hospitals within the state. The state has an independent agency, the Maryland Health Services Cost Review Commission (HSCRC), that determines the price that each hospital can charge for every procedure. In fact, even Medicare defers to the prices that the HSCRC sets (Maryland is the only state to have such a waiver). Given the CMS data released, it is clear that these price controls have a significant impact on lowering the cost of hospital care in Maryland. Looking at the 50 hospitals in the greater DC / Baltimore area, the hospitals in Virginia charge about 77% more, and DC hospitals charge about 175% more, than Maryland hospitals. Although people with health insurance will pay a lower, negotiated rate than the billed amount, uninsured people typically face the full sticker price. I, for one, hope that CMS will continue to release these data sets in the future so that we can all stay better informed about the often secretive billing rates of hospitals.
Please read my disclaimer.