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Why do charges vary between hospitals for the same procedure or service?

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Why do charges vary between hospitals for the same procedure or service?

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There are many variables that impact hospital charges. These include: Patient Severity: Patients that are sicker or have multiple medical conditions generally require additional services, resulting in higher hospital charges. Payer Mix: Each hospital has a unique mix of payers. Government programs such as Medicare and Medicaid generally pay hospitals at rates less than the actual costs of providing care. Hospitals cannot remain financially viable if costs consistently exceed payments. As a result, hospitals that have a higher percentage of government-program patients must attempt to recover a greater percentage of their operational costs from privately insured and self-pay patients. New Technology: Hospitals with new technology may have higher charges than those with older equipment. The replacement cost for new equipment is typically higher than the original cost of the old equipment. In general, new technology improves patient care outcomes.

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There are many variables that impact hospital charges. These include: Patient Severity: Patients that are sicker or have multiple medical conditions generally require additional services, resulting in higher hospital charges. Payer Mix: Each hospital has a unique mix of payers. Government programs such as Medicare and Medicaid generally pay hospitals at rates less than the actual costs of providing care. Hospitals cannot remain financially viable if costs consistently exceed payments. As a result, hospitals that have a higher percentage of government-program patients must attempt to recover a greater percentage of their operational costs from privately insured and self-pay patients. New Technology: Hospitals with new technology may have higher charges than those with older equipment. The replacement cost for new equipment is typically higher than the original cost of the old equipment. In general, new technology improves patient care outcomes. In addition, it can result in patients rec

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