Expert Commentary

Health care as a “market good”? Appendicitis as a case study

2012 study from the University of California, San Francisco, published in the Archives of Internal Medicine about large variations in health care costs in California hospitals.

The dramatic variation of health care costs across the United States was one of the important factors behind the U.S. Patient Protection and Affordable Care Act, passed by the U.S. Congress and signed by President Obama in 2010. Moreover, research programs such as the Dartmouth Atlas of Health Care project have documented how higher costs do not necessarily result in better patient outcomes.

A 2012 study from the University of California, San Francisco, published in the Archives of Internal Medicine, “Health Care as a ‘Market Good’? Appendicitis as a Case Study,” analyzed 2009 data from 19,368 adult patients treated for appendicitis in California hospitals. To ensure valid comparisons, the researchers examined “only uncomplicated episodes of acute appendicitis” that involved “visits for patients 18 to 59 years old with hospitalization that lasted fewer than four days with routine discharges to home.”

The study’s findings include:

  • The lowest charge for removal of an appendix was $1,529, while the highest was $182,955. The median was $33,611.
  • Treatments for Medicaid patients were associated with a 2.3% cost increase; for uninsured patients, related costs were 1.4% higher than the median.
  • The median charge for the procedure at a county hospital was 36.6% lower than at nonprofit hospitals; costs at for-profit hospitals were 16.3% higher.
  • Even within the county with the lowest range of charges, Fresno, the highest and lowest costs varied by $46,204, suggesting that geography does not fully explain the dramatic variations.

The researchers conclude: “Our first result of the median charge for treating ‘uncomplicated’ appendicitis of $33, 611 would certainly startle many patients. Given estimates that 60% of bankruptcies in the United States involve catastrophic medical expenses, these data should alarm those making decisions about our society’s ability to obtain medical care without financial catastrophe.”

Tags: medicine, health care reform, Obamacare

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