Birth costs vary widely, study finds

Calif. hospital charges differed by thousands

NEW YORK — The cost of giving birth at a hospital can vary by tens of thousands of dollars, a price range that is ‘‘largely random’’ and unexplainable by market factors, a California study has found.

Charges for a noncomplicated vaginal delivery in the most populated US state ranged from $3,296 to $37,277, and $8,312 to $70,908 for a noncomplicated cesarean section, according to researchers at the University of California at San Francisco. Institutional and market factors could only explain 35 to 36 percent of the variation in charges, according to the study, released online Thursday in the medical journal BMJ Open.

Health advocates nationwide are calling for more transparency in an industry where pricing variables are largely opaque.


Data released by the US Centers for Medicare and Medicaid Services in May showed hospital charges for the same procedures vary by thousands of dollars across the country, even in the same city.

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‘‘The market doesn’t work and the system doesn’t regulate it, so hospitals can charge what they want,’’ said Renee Hsia, lead author of the study and associate professor at the University of California at San Francisco’s School of Medicine. ‘‘The scary thing is, as patients, you don’t have this information.’’

Hsia said the wide swing in the charges probably exists across the United States.

‘‘I am certain that this variation is not isolated to California,’’ she said. ‘‘ The only place where this might be different is certain states where they’re starting to put caps on spending, like in Massachusetts.’’

Researchers studied about 100,000 births as well as three sets of variables that could affect costs: patient characteristics, such as the length of stay; hospital characteristics, such as nonprofit status; and market factors including the wage index, which measures the cost of living. They determined that these factors combined only explained about 35 percent of the variability in charge.


Anne McLeod, senior vice president of health policy for the California Hospital Association, said her group doesn’t dispute that charges vary widely, though she considers the study to have ‘‘a major flaw’’ because the authors looked at costs before they are discounted by insurers. The relevant numbers are the discount prices negotiated between insurers and hospitals, which aren’t public information, McLeod said.

Not able to access the negotiated numbers, researchers used a discount estimate of 37 percent based on an analysis of hospital receipts compared with charges, and reported a similarly large variation in pricing.

‘‘The hospitals enter into confidential negotiations with health plans and, like many other industries, people are not required to disclose trade secrets,’’ McLeod said. The study ‘‘created a broad-based estimate and it’s not indicative of how the actual price is agreed upon.’’