It may be easy to explain the birds and bees to a kid wondering where babies come from but deciphering a hospital bill for a baby’s delivery charges is a different kind of lesson entirely. One recent study explored hospital delivery charges in California and discovered the cost varies widely and depends on many variables, including what hospital the baby comes home from.

Delivery room in hospitalDr. Renee Hsia led a team of investigative medical researchers through hospital maternity bills in California in 2011. These medical records involved 76,766 vaginal deliveries with no complications plus 32,660 uncomplicated cesarean-section deliveries.

Dr. Hsia is an associate professor of emergency medicine at the University of California in San Francisco (UCSF) and faculty member of the university’s Institute for Health Policy Studies. Her study was inspired by the more consumer-oriented system of medicine promised in current healthcare reforms.

Her study revealed wide discrepancies in the cost of having a baby in California. The bottom line?

The UCSF team compared hospital bills item by item and evaluated differences that included length of hospital stay, market competition, and who owns and / or operates the hospital.

Even though the price tag for vaginal delivery, for example, was ten times higher at the upper end of the scale, the research team could account for only 35 percent of the difference, leaving 65 percent of the bill unidentifiable.

To complicate the issue, healthcare insurers usually only pay about one-third of the billed rate. As much as $1.3 billion was billed during the study period but never paid, suggesting the unpaid portion is excess charges that probably shouldn’t be billed at all. Actual details of costs billed and payments made were estimated by the research team in many cased due to strong resistance from the medical community to disclose factual details.

In California, prices are highest where hospital competition is strongest, where more patients are insured, and where the population is more severely ill in general. For-profit hospitals charge more than non-profits.

Maternity billing records were used in the study because childbirth is the most common cause for a hospital stay. It is likely the billing practices used in California are used elsewhere, too.

According to Hsia, a lack of regulation means “hospitals can charge whatever they want.” She adds, “Even though we talk about consumer empowerment, that can’t be a reality until patients are able to obtain information about what they will be charged.”

Dr. Hsia advises people to get estimated prices for hospital stays whenever possible but “to be aware that they may encounter significant barriers when doing so.”

Source: McNamee, David. “Are California women being over-charged for hospital births?” Medical News Today. MediLexicon International Ltd. Jan 17, 2014. Web. Jan 23, 2014.