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Home / MCNTalk / One Procedure, Many Prices

March 5, 2015

One Procedure, Many Prices

A new report from Blue Cross Blue Shield, The Health of America analyzed the cost of hip and knee surgeries in 64 areas across the US and found that the amount charged for the same procedure in the same city varied by as much as 313%.

The amount charged by the hospital is different from the amount negotiated by an insurer, which is itself different from the amount owed by a patient. That’s one reason deciphering hospital bills can be complex. It’s also a perfect example of why people can end up buried under a mountain of confusing medical debt if they are uninsured, lack good insurance, or simply don’t understand what their insurance plans actually cover.

“If you are in a plan that charges a $30 copay to see an orthopedist, that is your cost,” explained Dan Mendelson, the CEO of consulting firm Avalere Health and a former associate director for health at the federal Office of Management and Budget. But if you have a high deductible, if your surgery isn’t covered, or if you are uninsured, your already high costs may end up being three times higher just because you chose the wrong hospital.

Would these differentials in price exist if the patients had some skin in the game and they rather than their carriers were paying the bulk of the charge? Or if “skin in the game” meant more than meeting an annual deductible.  Though higher deductibles and co-pays do prompt patients and families to track expenditures and self-ration when possible, it’s not a step in the direction of making prices readily available or easy to understand.  And the disparities begs the question of why carriers like the Blues are willing to pay the higher prices when one of their insureds choose one of those hospitals.

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Tagged: Cost Containment, Government Policy, Health Policy, The Practice of Medicine Leave a Comment

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