Case Study: Variation in Hospital Charges: Using Appendicitis as a Case Study


Charges for hospital care seem to be arbitrary and price variation seems to be widespread. However, most of this is anecdotal and there is less evidence showing whether price variation is as extreme as reported given a specific condition within a homogenous population. This study seeks to investigate whether non-elderly adults with a diagnosis of uncomplicated appendicitis, hospitalized in California and discharged home, have a similar range of hospital charges for their care.


We used patient-level data to obtain charges for all hospitalizations for patients aged 18-59 for uncomplicated acute appendicitis who had a length of stay of four days or less with a routine discharge to home, and reported the charges. After examining 19,368 adult patients, we found that the median charge was $33,611, with $1,529 as the lowest charge and $182,955 as the highest charge.


These findings point to the unpredictability of hospital charges and how the staggering range of charges may reflect inefficiencies in the hospital pricing system. In fact, these data might be seen as a reflection of the dysfunctional and irrational system of how healthcare prices are determined and how patients, who are now increasingly responsible for a higher proportion of their hospital bills, may not be able to function as rational consumers in the healthcare market.

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Study Reference:
Hsia RY, Kothari AH, Srebotnjak T, Maselli J. Health Care as a “Market Good”? Appendicitis as a Case Study. Arch Intern Med. 2012;172(10):818-819. doi:10.1001/archinternmed.2012.1173.