Huge variation in allowable prices for CT and MRI services
August 13, 2024
I took time off last week, so this is a re-run of a post from fall, 2022 on variability in negotiated commercial prices within the same hospital.
Researchers reported in Radiology that commercial insurance negotiated prices for 13 shoppable radiology services had enormous variation - not only within each hospital, but even among different health plans operated by the same medical carrier at the same hospital. The graphic above shows the median ratios between the highest and lowest negotiated price paid by a commercial health plan for a service at a hospital. The study is limited to hospitals that disclosed their prices on the platform Turquoise Health. The researchers found that variation was highest for services like MRI and CT scans that have high fixed costs.
Implications for employers:
- The U.S. system pricing system is remarkably opaque. Hospital transparency regulations are finally beginning to lift this veil on pricing, and insurance transparency rules should make it easier for technology companies to display prices.
- Studies show that patients are generally NOT effective at shopping even for “shoppable” services, but availability of prices could help carriers and employers fashion health plans that will “steer” more of their members to providers with lower unit cost.
Update: More transparency data has become available from medical carriers, although the data is still not widely available to plan members.