The variation in hospital charges uncovered in the data released by Medicare earlier this year is significant in its insignificance. As anyone who has worked in health care knows, pricing in the health care market is opaque and unmanageable. Hospital prices in particular, serving primarily as a tool for negotiations with insurers, have long been known to vary widely. Steven Brill described the nature of the hospital chargemaster in great detail in his Time magazine article a few months ago, including the fact that the only people that are asked to pay list price are the uninsured.
Back in the 1970s, Jack Wennberg began documenting unexplainable variation in health care, including utilization and pricing. Now, the release of Medicare charge data has symbolic significance as a highly visible move that demonstrates CMS’ support for continuing the transition to more effective price transparency.
