AHRQ Stats: Hospital Stay Charges
The average charge for a hospital stay among all payers was $39,500 in 2013. Charges varied according to insurance coverage, averaging $47,200 for Medicare, $30,900 for Medicaid and $35,900 for private insurance. (Source: Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project Statistical Brief #209: Geographic Variation in Hospital Inpatient List Prices in the United States, 2013.)
Zeynal Karaca, Ph.D., and Brian Moore, Ph.D.
In the United States, each hospital has a chargemaster that contains the hospital's own list prices for all billable procedures and services performed at the hospital. Chargemasters use codes from the American Medical Association's Current Procedure Terminology system and the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) procedure system.1 Hospital list prices, reported as charges in the Healthcare Cost and Utilization Project (HCUP) databases, reflect the amount the hospital billed for the entire hospital stay, usually excluding professional (physician) fees, and vary across hospitals and markets.2
Hospitals periodically update the list prices in their chargemasters to account for new procedure codes and changes in their operating costs, expected payer mix, expected service mix, and volumes.3 As a result, there might be substantial variation in charges for many individual items within the chargemaster over time and across hospitals and markets.4,5
Major public and private insurance providers negotiate a discount from the list prices with hospitals. Actual payments to hospitals by public and private payers are generally much lower than their reported list prices and are typically adjusted by an area wage index (AWI) to account for geographic variation across regions in labor costs, which represent a component of pricing that is to some degree beyond the hospital's control. Hospitals across different regions might experience sizable differences in reimbursement because of these AWI adjustments.
This HCUP Statistical Brief presents variation in charges for inpatient stays in the United States in 2013. The variation in charges adjusted by an AWI6 also is presented to provide potential insight into the extent to which AWI adjustment accounts for geographic variation in hospitals' list prices. Mean charges per inpatient stay (with and without AWI adjustment) are calculated for each of the nine U.S. census divisions for all payers, Medicare, Medicaid, and private insurance. For each payer group, mean charges in each census division then are divided by mean charges nationally, and ratios are presented in maps to estimate the direction and magnitude of the difference in mean charges between each division and the nation as a whole. Ratios with values greater than 1.0 indicate divisions with mean charges that are greater than the national mean; values less than 1.0 indicate divisions with mean charges that are less than the national mean. All differences between estimates noted in the text are statistically significant at the 0.05 level or better.
Mean inpatient charges for all payers, by census division, 2013
Figure 1 displays the ratios of U.S. census division-level mean charges relative to the national mean values per inpatient stay for all payers. In the top map charges are unadjusted, and in the bottom map charges are adjusted by the AWI.