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Q  Why are there price differences between hospitals?
A There can be variations, sometimes large ones, in the prices hospitals set for the same procedure or service. This is because there are many factors that go into determining the cost of hospital services, and each institution has its own set of factors – or cost structure – to manage. For example, some organizations have higher cost structures due to high-intensity services, such as transplant, trauma, and neonatal intensive care, that are expensive to maintain, or mission-related costs such as teaching, research, or care for low-income populations. Also a significant factor is that different parts of the country have higher or lower costs of living. This affects wages, which are one of the largest expense categories for hospitals. (Source: American Hospital Association. Pricing Transparency Efforts Accelerate: What Hospitals and Other Stakeholders Are Doing to Support Consumers, July 2014. http://www.aha.org/research/reports/tw/14july-tw-transparency.pdf.)

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