Health Savings Account Blog

As more people buy HSA plans, the administration maintains, cost increases would slow because people would work harder to look for the best deal or decide they don't really need a medical service after all.

The new Medicare data released covers such procedures as heart operations, the implant of heart defibrillators and back and neck operations.

The most common elective surgery paid for by Medicare is the replacement of a hip or knee. The government information shows that those procedures cost an average of $11,761. Medicare paid between $9,992-$12,173, on average.

The government broke the numbers down to the county level. In Baldwin County, Ala., for instance, three hospitals provided 373 operations for knee or hip replacement, and Medicare paid those hospitals a range of $8,859 to $8,936.

The government also noted how many hip or knee replacements each Baldwin County hospital performed. One hospital in the county performed 11, another 66, and still another, 296. Officials say the frequency of a particular procedure can be an indication of quality, with more being better.

"There is a large variation in how much you pay for services if you go to different doctors or hospitals or providers," said Mark McClellan, administrator for the Centers for Medicare and Medicaid Services. "There's also significant variation in the quality of care you can get, so this is important information for anyone to pay attention to."

Tom Nickels, senior vice president of government relations for the American Hospital Association, said the information had value but was limited in its usefulness. People don't need to know what Medicare pays for an operation as much as they need to know the details of their own insurance policy, he said.

"It's worth looking at, but it doesn't supplant the need to know what your co-insurance obligation is," Nickels said.

Mike Leavitt, secretary of the Department of Health and Human Services, said the government was taking the initiative when it comes to transparency. But the goal is for the private sector to follow, he said.

"The federal government is the biggest single purchaser of health care in America, and by taking steps to post prices and quality data, we hope to encourage more insurance companies, hospitals, clinics and doctors to do the same," Leavitt said.

Trade groups representing businesses said the release of the data was an important first step in empowering consumers.

"Unfortunately, today's consumer is completely unaware of the cost of their health care until they receive a bill in the mail," said the Business Roundtable, an association of chief executive officers. "By making cost information available, consumers will be better informed on pricing, and better able to make educated health care decisions.

The data about the cost of a particular service should be especially useful for the uninsured as they seek steeper discounts, Leavitt noted, because they don't have someone negotiating cheaper rates on their behalf. They can be charged three times as much as what the government or a private insurance company pays, he said.

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