Inpatient Hospital Charge Variability of U.S. Hospitals

Abstract

BACKGROUND: The range of hospital charges for similar diagnoses show tremendous variability across U.S. hospitals. This charge variability remains unexplained. OBJECTIVE: We aimed to describe hospital charge variability in the U.S. and examine its relationship to local health factors. DESIGN: This was a descriptive study of the 2011 Medicare Inpatient Charge data summarizing inpatient hospital charges billed to Medicare. This data was evaluated using 29 county-level measures of health status, health behavior, clinical access and quality, built environment, and socioeconomic status in a clustered, multivariate linear regression. PARTICIPANTS: 2871 U.S. hospitals registered with Medicare and with at least ten discharges for diagnosis-related groups (DRGs) of six common inpatient conditions. MAIN MEASURE: Inpatient hospital charges were assessed. KEY RESULTS: No community health measures were associated with hospital charges. The one notable exception associated with higher charges was higher rates of uninsured status ($344.84 higher charges for every one-percentage point increase in prevalence (p < 0.001)). One variable was associated with lower hospital charges: the percentage of children living in poverty [$309.30 lower charges for every one-percentage point increase in prevalence (p < 0.001)]. CONCLUSIONS: Overall, hospital charges lacked an association with population health measures, and their variability remains largely unexplained. However, the association of higher charges with uninsured status raises concerns about hospitals’ price-setting strategies, such as price discrimination and cost-shifting strategies that expose vulnerable populations to great financial risks.