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Health Care Price Report

By May 15, 2014Commentary

As people covered by commercial health insurance become responsible for more health care costs through higher deductibles and copayments, understanding the price of a health care service and the difference in prices between providers is more important.  ChangeHealthcare attempts to provide this data for consumers and issues a regular report on prices and variation.  The latest report covers the 4th quarter of 2014.  (ChangeHealthcare Report)   The report focuses on high-cost services which also tend to have high variability in pricing across providers.  These, according to the report, provide the greatest opportunity for reducing spending without likely affecting quality.  While the report does not attempt to identify causes for the variation, it does note that setting seems to play a role, which is supported by other research showing, for example, that the same service in a hospital outpatient setting is more expensive than in a physician’s office.  Among the high-cost, high variability services are C-section deliveries, with prices varying by 164%, from $6,680 to $17,619 around a median of just under $12,000.  This variability has actually lessened from prior quarters.  Vaginal delivery also shows high variance, from $4,359 to $12,613, a range of 189%.  This variability also appears to be declining and the median price is trending downward.  Colonoscopy prices varied 208% from $1,379 to $4,242.   Mammograms ranged from $135 to $397, a 189% variance.  The median price and variance has been steady.  MRIs varied 451%, from $511 to $2,815, but the medians tend to be nearer the lower end.  Other imaging services, such as ultrasounds and CT scans, also showed large variation.  Even office visits had a large range of prices, for example, a women’s health visit went from $69 to $200 and primary care visits ranged 174% from $71 to $175.  And the preventive services which must be provided without copay under the reform law had large price ranges, which must concern payers because they cannot use financial incentives to encourage members to use lower-priced providers.  Payers may need to consider designated networks for these preventive services.

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