Inpatient Hospital Charge Variability of U.S. Hospitals

The range of hospital charges for similar diagnoses show tremendous variability across U.S. hospitals. This charge variability remains unexplained.

We aimed to describe hospital charge variability in the U.S. and examine its relationship to local health factors.

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.

2871 U.S. hospitals registered with Medicare and with at least ten discharges for diagnosis-related groups (DRGs) of six common inpatient conditions.

Inpatient hospital charges were assessed.

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)].

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.