CALPIRG report: Bay Area hospital charges highest in state

July 12, 2012 7:07:39 PM PDT
A new report reveals some major discrepancies in the cost of having surgery in California. The price of many common surgical procedures is far higher in the Bay Area than anywhere else in the state.

The list prices or "charge master," as they are officially known, are the prices hospitals want to be paid, not necessarily what they receive. The real prices hospitals receive for caring for most of us are a secret.

Most of us know it's expensive to live in the Bay Area. So it might come as no surprise that the charges hospitals list for surgery are the highest in the state.

A new report from the California Public Interest Research Group (CALPIRG) shows the average list price for surgery in Alameda County is 163 percent above the statewide median, the highest in the state. It's followed closely by San Mateo County and Contra Costa County. San Jose, Santa Rosa and San Francisco round out the top six. Even Los Angeles at 105 percent above the median is cheaper than the Bay Area. The area with the cheapest list price is Fresno.

"What that means is a pregnant woman in San Mateo County could fly a private jet, have the nicest hotel in Fresno, and still save thousands of dollars on her birth," said CALPIRG's Daniela Uribe.

The report acknowledges hospitals never get what they ask for. In fact, insurance companies negotiate discounts and Medicare and Medi-Cal dictate to the hospitals what they will be paid.

"There's almost no relationship between the listed hospital charge and what you might actually pay through your insurance company," said Maribeth Shannon with the California Healthcare Foundation, a non-profit dedicated to improving healthcare.

"We've seen that as hospital charges have increased over the past years, we've also seen a correlation in the increase in the insurance premiums that patients are being charged," said Uribe.

Both CALPIRG and the foundation agree that more transparency is needed on pricing. Except for Medicare, what hospitals get for performing surgeries are kept a secret. So for those with insurance it pays to shop around for the cheapest co-pay option.

"If you contact your health plan, your health plan can tell you what you'll be responsible for," said Shannon. "So they may not tell you the negotiated rate they have with the hospital, but they can estimate what your financial liability's going to be."

No one representing the hospital industry was available to talk on camera before our deadline, but the California Hospital Association told 7 On Your Side by phone that it, too, agrees that list prices are meaningless in today's market.


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