It’s a frustrating reality of the medical marketplace: Prices are all over the map.
If you need an angioplasty to treat heart disease in Louisville, it will cost about $16,313. But the identical procedure in Sacramento will cost nearly four times as much — $61,231.
And even within the same Boston-area market, the price of removing a common type of skin cancer can vary by hundreds of dollars depending on which hospital you go to.
Prices vary wildly from city to city and hospital to hospital for all sorts of medical care, and it’s nearly impossible to get a straight answer ahead of time on what you’ll pay. That means real consequences for family budgets now that consumers must pick up a greater-than-ever share of the tab.
New Hampshire patient advocate Dave deBronkart spent three months shopping for care and researching costs before being treated for basal cell carcinoma on his jaw line three years ago. Facing a $10,000 deductible that he had to pay before insurance kicked in, he examined options for treatment at three different Boston-area hospitals. The 65-year-old was told that one treatment, an excision, would cost up to $2,062 at one hospital, up to $2,500 at another and up to $4,010 at a third. Prices for other treatments also varied substantially by hospital.
“There can be no explanation other than some secret malarkey going on,” deBronkart said. “I feel disempowered and disrespected, because aside from the incredible cost crunch we’re all experiencing, it’s a downright sin that my family can’t readily find out what the options are and what the costs are.”
Nothing has changed, he said, since Princeton University health care economics scholar Uwe Reinhardt wrote a 2006 article in the journal Health Affairs titled: “The Pricing of U.S. Hospital Services: Chaos Behind a Veil of Secrecy.”
The most recent of many studies examining the issue looked at angioplasties. The Blue Cross Blue Shield Association and Blue Health Intelligence analyzed three years of company claims data in 86 of the 100 largest metropolitan areas among patients getting elective (not emergency) angioplasties, which use a balloon to widen a narrowed artery and restore blood flow. About a million of these are performed each year, making them a top 10 contributor to health care costs.
After controlling for the overall costliness of an area, researchers still found huge differences from city to city and within the same market. For example, costs varied by 76 percent from hospital to hospital in Louisville, with a median minimum cost of $13,372 and a median maximum cost of $23,486. And higher cost didn’t equate to better quality within a market, said Trent Haywood, chief medical officer at Blue Cross Blue Shield.
Other reports have described the same place-to-place, hospital-to-hospital cost differences for knee and hip replacements, a chemotherapy injection used to treat lymphoma and leukemia and a number of other procedures and services.
Experts cite many reasons, such as the cost to operate a hospital, the mix of public and private insurance there and reimbursements negotiated between insurers and providers. In the past, much of this remained hidden. But it’s become painfully clear since deductibles rose nearly 50 percent from 2009 to 2014 and patients also must pay “co-insurance,” a portion of covered costs beyond that. And costs are higher if they choose a provider not in their insurance plan’s network.
In the case of angioplasties, Blue Cross officials said patients are typically on the hook for about 20 percent of overall costs. So if the procedure costs $22,000 at one hospital, the insurer said, out-of-pocket costs may be around $4,000, compared with around $6,000 at a hospital where the procedure costs $44,000, factoring in an out-of-pocket maximum for a single coverage plan.
“The whole paradigm has shifted,” said Robin Gelburd, president of FAIR Health, a nonprofit health data corporation that promotes transparency in health care costs. Consumers used to play “a supporting role” to employers and health plans when it came to sorting out cost information. Now, she said, they must navigate the confusing world of cost sharing, high-deductible plans, in- and out-of-network care and all the different physicians who might bill for a procedure.
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