Estimating Variability in Hospital Charges: The Case of Cesarean Section

TL;DR

This study analyzes the causes of price disparities in cesarean sections using newly available hospital pricing data, revealing significant variability influenced by hospital characteristics but not by income or inequality measures.

Contribution

It provides an empirical analysis of hospital pricing variability for C-sections using recent CMS data, highlighting key factors affecting price differences.

Findings

C-section prices range from $162 to $115,483.

Hospital quality and teaching status significantly affect prices.

Median income and wealth inequality are not statistically significant factors.

Abstract

This study sought to better understand the causes of price disparity in cesarean sections, using newly released hospital data. Beginning January 1, 2021, Centers for Medicare and Medicaid Services (CMS) requires hospitals functioning in the United States to publish online pricing information for items and services these hospitals provide in a machine-readable format and a consumer friendly shoppable format. Initial analyses of these data have shown that the price for a given procedure can differ in a hospital and across hospitals. The cesarean section (C-section) is one of the most common inpatient procedures performed across all hospitals in the United States as of 2018. This preliminary study found that for C-section procedures, pricing varied from as little as \$162 to as high as \$115,483 for a single procedure. Overall, indicators for quality and whether or not the hospital was a teaching hospital were found to be significantly significant, while variables including median income and the gini coefficient for wealth inequality were not shown to be statistically significant.