But the disparity in prices for the same procedure at different hospitals could put pressure on healthcare executives to explain their cost structures, said Sal Barbera, a former hospital chief executive and now a Florida International University professor of health-services administration.
Some hospitals will claim their patients are sicker, Barbera said. And some hospitals could be dealing with patients who have multiple complications. So somebody with diabetes may also have heart problems and other complications. Those kinds of multiple-complication patients will definitely add up charges.
Hospitals typically dont explain what goes into the cost of care. Teaching hospitals, for example, have to pay medical residents, and those costs may get passed on to patients.
We have got to come up with a simpler way to pay hospitals based on true costs, Barbera said, because we really dont know what the cost structure is the way theyre charging.
Barbera said some hospitals may inflate prices simply because no ones ever paid much attention to them since few insured people actually pay or even see the advertised price.
Medicare has a flat amount it will pay based on a predetermined formula, he said. In fact, thats why Medicare went to that payment method, because of the inconsistencies in all these charges.
Private insurers also do not pay the advertised price.
They all pay on a negotiated fee, Barbera said. So the charges dont mean anything to them either. Theyre going to pay on a per diem amount to a given hospital.
The patients who do see the full prices are typically the uninsured. And unless theyre independently wealthy, Barbera said, many uninsured patients simply dont pay at all.
Low reimbursement rates cause hospitals to jack up the price of medical procedures well above actual costs, said Linda Quick, president of the South Florida Hospital and Healthcare Association, an advocacy and education group.
The charges are always substantially higher than the costs, because the reimbursement usually comes somewhere in between the two or not at all in some cases.
With the release of the price data, consumers now have a greater ability to shop around, and hospitals have a reason to adjust inflated rates, Health and Human Services Secretary Kathleen Sebelius said.
When consumers can easily compare the prices of goods and services, producers have strong incentives to keep those prices low, Sebelius said. Hospitals that charge two or three times the going rate will rightfully face greater scrutiny. And those that charge lower rates may gain new customers.
Barbera said he thinks the government released the new data to push the healthcare industry to contain or at least provide a better explanation for their costs.
Its probably coming out because right now theres a lot of focus and attention on healthcare reform, and I think that theres a lot at stake, he said. Clearly what healthcare reform has done is its kind of stirred the pot, and now these things are coming out.
Barbera said private insurance companies also could make use of the new Medicare data to examine their negotiated fees with hospitals.
Typically, Humana, Blue Cross are going to pay more than the government pays for a particular service, he said. But theyre also going to use this information as well.
Even though people are not on Medicare, the Medicare process has kind of a halo effect on other payers as well.
Tony Pugh of the McClatchy Washington Bureau, Trevor Aaronson of the Florida Center for Investigative Reporting and Lazaro Gamio of The Miami Herald contributed to this report.
A previous version of this article misstated the costs of pacemaker implants at the University of Miami and Jackson Memorial Hospital.