Variation in hospital inpatient charges by payer in Houston, Texas

An analysis of variation in hospital inpatient charges in the greater Houston area is conducted to determine if there are consistent differences among payers. Differences in charges are examined for 59 Composite Diagnosis Related Groups (CDRGs) and two regression equations estimating charges are specified. Simple comparison of mean charges by diagnostic categories are significantly different for 42 (71 percent) of the 59 categories examined. In 41 of the 42 significant categories, charges to Medicaid were less than charges to private insurers. Meta-analytic statistical techniques yielded a weighted average effect size of $-$0.7198 for the 59 diagnostic categories, indicating an overall effect that Medicaid charges were less than private insurance charges. Results of a multiple regression estimating charges showed that private insurance was a significant independent variable, along with age, length of stay, and hospital variables. Results indicated consistent differential charges in the present analysis. ^