The cost of treating Psychoses increased 78% over just two years at Massachusetts General Hospital according to recently released Medicare procedure cost data.

In 2013, the hospital charged an average of $60,955 for inpatient psychoses diagnosis compared to their 2011 average price of $34,180 - that’s more than a $25,000 increase. We found steep increases like these common throughout the country, but especially in states like Ohio and Massachusetts.

At BetterDoctor, we’re in the business of healthcare transparency. We know finding the best care for a person can mean finding the most appropriate doctor, highest-rated hospital, best quality care and most affordable procedures - all at the same time.  There are a lot of factors to consider when looking for medical care, so we wanted to make one of them more transparent: procedure costs.

Thanks to the Affordable Care Act, the government now has to report more cost data to the public to make health care prices more transparent. Last week, the Center for Medicare and Medicaid services released new data about procedure costs in 2013.

What we did and why we did it

Because your medical provider decisions are made locally, we want to show consumers where the prices are increasing the most - and the least. People generally use the health care facilities around where they live, so living in a city where hospital costs are under control is extremely important. We wanted to see where medical costs have risen the most, so we crunched the numbers and compared costs from 2011 (when cost data was first released) to the new 2013 numbers.

Trends and Takeaways

We found that some cities average medical costs increased dramatically, while others’ actually decreased. Skyrocketing medical costs are a huge problem in the US. Multiple studies show that in comparison to other developed countries in the world, the US spends the most on healthcare per person, but we have some of the lowest-quality, least-accessible care - on top of leading generally unhealthy lives.

  • 32 Cities’ average procedure costs decreased (12% of all cities)
  • 230 Cities’ average procedure costs increased (88% of all cities)
  • The average of all cities’ average procedure cost changes is +3.1%. This is the average of all city’s averages, not all procedure costs averaged.

What you can do

To combat rising costs in your city and make sure you won’t be left with a monstrous bill, there are a few things you can do.

  • Make sure you have insurance coverage. Having health insurance is the single most important way to lower healthcare costs for yourself. Health insurance is intended to protect patients from financial ruin should they become sick. Your health insurance company will negotiate high hospital prices for you, they will pay what they pledge and then charge you a small percentage in the form of a copayment or deductible. It’s much better to pay $4,000 a year for health insurance than risk paying $100,000 for an emergency surgery.

  • Know your health and make sure you’re covered by an appropriate plan. If you know you’re going to need a lot of healthcare in the coming year, it might be worth it to sign up for a more expensive plan with lower deductibles, copayments and out-of-pocket maximum. The Affordable Care Act makes plans affordable to consumers in an online marketplace. There, every plan has different ratings - bronze, silver, gold, platinum, and catastrophic - they differ based on how much they cost and how cost-sharing works. Read about how to choose one here.

  • Visit doctors in your network who are covered by your insurance plans. Seeing doctors who are out of your network can be incredibly expensive. Research before you visit and confirm your insurance will be accepted with office staff before you have your appointments.

  • Advocate for yourself. Pay attention to your bills, keep records of how much you’re paying and get in touch with your doctor’s office or insurance company if you see mistakes.

Cities where medical costs have risen the most:

  1. Canton, Ohio (+39.29%)
  2. Springfield, Massachusetts (+18.42%)
  3. Kettering, Ohio (+12.36%)
  4. Worcester, Massachusetts (+11.26%)
  5. Boston, Massachusetts (+10.31%)
  6. New Orleans, Louisiana (+10.02%)
  7. Odessa, Texas (+9.39%)
  8. Tyler, Texas (+9.18%)
  9. Wichita Falls, Texas (+8.73%)
  10. Charlottesville, Virginia (+8.64%)
  11. Akron, Ohio (+8.43%)
  12. Victoria, Texas (+8.39%)
  13. Boise, Idaho (+7.57%)
  14. Morgantown, West Virginia (+7.53%)
  15. Muskegon, Michigan (+7.53%)
  16. St. Paul, Minnesota (+7.11%)
  17. Manchester, New Hampshire (+7.06%)
  18. Winchester, Virginia (+6.83%)
  19. Bend, Oregon (+6.81%)
  20. Seattle, Washington (+6.51%)
  21. Duluth, Minnesota (+6.45%)
  22. Clearwater, Florida (+6.42%)
  23. Roanoke, Virginia (+6.39%)
  24. Salem, Oregon (+6.24%)
  25. Wilmington, Delaware (+6.22%)

Cities with medical cost have actually decreased (2011-2013):

These cities’ procedure costs submitted to Medicare were impressively slow changing. In our study we only looked at average procedure cost changes - not price differences, so these cities might have hospitals with already high procedure costs, but the changes in price are incredibly important to consider. Hospitals with lower cost changes are better at controlling costs, perhaps due to becoming more efficient at providing the same quality care. Making this list is a major accomplishment for a city’s hospitals.

  1. Casper, Wyoming (-8.28%)
  2. Morristown, New Jersey (-4.38%)
  3. Lake Charles, Louisiana (-3.72%)
  4. Greensboro, North Carolina (-3.52%)
  5. Albany, Georgia (-3.39%)
  6. Pontiac, Michigan (-2.82%)
  7. York, Pennsylvania (-2.33%)
  8. Scranton, Pennsylvania (-2.24%)
  9. Johnson City Tennessee (-2.15%)
  10. Winston, North Carolina (-2.14%)
  11. Asheville, North Carolina (-1.79%)
  12. Macon, Georgia (-1.66%)
  13. Mobile, Alabama (-1.43%)
  14. Wilkes, Pennsylvania (-1.35%)
  15. Royal Oak, Michigan (-1.26%)
  16. New Haven, Connecticut (-1.19%)
  17. Rapid City, South Dakota (-1.14%)
  18. Jackson, Tennessee (-1.12%)
  19. Augusta, Georgia (-1.11%)
  20. Ormond Beach (-1.00%)
  21. Peoria, Illinois (-0.87%)
  22. Slidell, Louisiana (-0.74%)
  23. Charleston, South Carolina (-0.54%)
  24. Raleigh, North Carolina (-0.49%)
  25. Alexandria, Louisiana (-0.38%)
  26. Allentown, Pennsylvania (-0.37%)
  27. Nashville, Tennessee (-0.27%)
  28. Erie, Pennsylvania (-0.24%)
  29. San Antonio, Texas (-0.19%)
  30. Columbia, South Carolina (-0.13%)
  31. Baton Rouge, Louisiana (-0.07%)
  32. Paterson, New Jersey (-0.05%)

What it means

Though the data is from Medicare, the numbers we used to calculate the fastest rising costs comes from the hospital’s procedure prices. The price charged to Medicare is the same price that the hospital would bill an individual’s private health insurance company or an uninsured person. The true amount Medicare actually pays for each procedure and associated bills is a negotiated portion of the overall cost. We chose to examine and compare the amount billed because it’s truer to the actual price tag most Americans face.

Methodology:

To find the cities where medical procedure costs are rising the fastest, we started with Medicare’s recently released inpatient procedure cost data from all US hospitals that receive Medicare payments for the most frequently billed discharges. We collected the inpatient procedure cost data per hospital for years 2011, 2012 and 2013.

Then, we calculated the price change by procedure by hospital from 2011-2013 into a percentage increase or decrease. We took these average cost changes by procedure (the total charged by each hospital - not the price eventually paid after negotiation) and grouped each city’s procedure cost changes together.

Then we averaged those changes for each city so each city had its own number. Finally, we sorted the city’s average cost changes and found the top 25 and bottom 32.

Data:

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Inpatient.html

Exclusions:

  • Medicare reports that for hospital providers that bill them for ten or fewer of any one procedure, they will not list the average costs publicly to protect beneficiaries’ privacy.
  • Procedures at hospitals with no data from either 2011 or 2013 were not included in our study as there is no way for us to accurately calculate the percentage price change over time.
  • We calculated the percent change with the equation: (Procedure cost 2013-Procedure cost 2011) / Procedure cost 2011.

Medicare’s data definitions

We calculated the cities with the fastest rising medical costs based on Average Covered Charges - the price charged by the hospital for each generalized diagnosis. The ‘Average Total Payments’ in the data we used enumerates the negotiated final price that has to be paid for by each patient.

The patient and their non-Medicare insurance (if any) is responsible for the difference between the ‘Average Total Payment’ and the ‘Average Medicare Payment’. We believed the Average Covered Charges was the most accurate data to work with because it is the cost charged to all recipients of the same diagnosis at a particular hospital.