Lack of price transparency is a problem that becomes readily apparent when considering the shocking price differences for the same procedure in the same area.
Recent findings from the Health Care Cost Institute found that even within the same metro area, the same medical service could cost up to 39 times more. In other words, you could pay $600 for a blood test in one place, or drive down the road and get the same test for $200. The same is true for baby delivery, office visits, mammograms, and many more services.
Typically, price disparity for medical procedures is understood to exist between different areas of the country. Larger metro areas typically have more expensive medical services. But what is less understood is that even within the same metro area, prices can vary wildly.
We see such price differences for medical procedures in the Utah area. The large majority of people in Utah are unaware that such price differences exist. Unfortunately, the current state of healthcare and health insurance has conditioned people to not bother knowing the price of care before they receive it. This results in enormously high healthcare costs that don’t actually need to be as high as they are.
The MotivHealth price transparency tool seeks to remedy the issue by providing prices for common medical procedures. Members can search by location, by procedure, or by facility, and see the best price and quality options.
Price Variance Is Bigger Than You Think
Consider what a separate report from the Health Care Cost Institute said:
“The magnitude of the price variation for the same service is striking, even after HCCI focused solely on the middle 80% of the distribution in order to moderate the effects of especially low or high prices in any given area:
- The cost of a C-section delivery within the San Francisco-Oakland-Hayward, California area varied by up to $24,107 (or 159 percent).
- In Toledo, Ohio the median price of a common blood test was $18, but the median cost for the same test in Beaumont, Texas was $443, a nearly 25-fold difference.
- A mammogram in Boulder, Colorado had a median price of $152, but 50 miles away in Fort Collins, CO, the same procedure at a different facility had a median price of $333, well over twice the price.
- The price of an office visit in Minneapolis-St. Paul-Bloomington, MN could be triple for some new patients ($266) compared to others ($87) in the same area.
Is there a difference in quality of care for the more expensive procedures? That’s an understandable concern. However, variances in quality of care are generally slight for common procedures like blood tests and medical imaging. Safety and qualification is overseen by various regulatory boards for medical practice. Variations in quality do not explain costs that triple and quadruple.
“It is highly unlikely that these pricing differences are related in any meaningful way to differences in quality or value.” said Niall Brennan, President and CEO of HCCI. “Employers should be outraged that they and their employees may be paying radically different prices based on factors like which provider they go to.”