Study says cost of appendix removal ranges widely

It's a common, straightforward operation, so you might expect charges to be similar no matter where the surgery takes place. Yet a California study found huge disparities in patients' bills — $1,500 to $180,000, with an average of $33,000.

The researchers and other experts say the results aren't unique to California and illustrate a broken system.

“There's no method to the madness,” said lead author Dr. Renee Hsia, an emergency room physician and researcher at the University of California, San Francisco. “There's no system at all to determine what is a rational price for this condition or this procedure.”

The disparities are partly explained by differences among patients and where they were treated. For example, some had more costly procedures, including multiple imaging scans, or longer hospital stays.

A very small number were treated without surgery, though most had appendectomies. Some were sicker and needed more intensive care.

But the researchers could find no explanation for about one-third of the cost differences.

Other developed countries have more government regulation that prevents these wild disparities. U.S. critics of that kind of system favor more market competition, yet the study illustrates that “the laws of supply and demand simply do not work well in health care,” said Dr. Howard Brody, director of the Institute for the Medical Humanities at the University of Texas Medical Branch in Galveston and a frequent critic of skyrocketing medical costs.

The study was published Monday in the journal Archives of Internal Medicine.

President Barack Obama's health care overhaul, now in the hands of the U.S. Supreme Court, would have little effect on the kinds of disparities seen in the study, policy experts say.

One section of the law bars tax-exempt hospitals from charging uninsured people more than the rates insured patients end up paying because of discounts negotiated by insurance companies.