By Melanie Evans
Updated Nov. 30, 2021 4:15 pm ET
The report, based on once-secret pricing data and published in the journal Radiology, found that thousands of hospitals didn’t report their prices despite a new federal requirement
The study found that one of the largest pricing gaps was for CT scans of the head.
PHOTO: ALEXA WELCH EDLUND/ASSOCIATED PRESS
Some hospitals charge up to 10 times as much as others for standard medical scans, according to the latest analysis of previously secret market rates.
Median prices for taking images of the brain, legs, abdomen and chest differed across hospitals by thousands of dollars in some cases, a team of researchers from Johns Hopkins and Michigan State universities reported Tuesday in the journal Radiology.
Their analysis compared median commercial prices among hospitals that complied with new federal rules this year to make rates public.
The findings confirm the wide pricing gaps across hospitals and large markups by some of them reported earlier by The Wall Street Journal. Health economists say the disparities reveal how little influence consumers have over pricing, unlike markets for groceries or airlines, where companies vie for business by offering good deals.
“This is very far away from a competitive market,” said Ge Bai, a professor of health policy and management at Johns Hopkins Bloomberg School of Public Health and an author of the imaging-price study.
Hospitals and insurers have long set prices in confidential negotiations, which has frustrated employers seeking to curb costs by shopping for better deals under worker health-benefit insurance plans. The average premium for family insurance offered as a workplace benefit increased 4% this year, with employers picking up about three-quarters of the tab, according to an annual survey by the nonprofit Kaiser Family Foundation.
“Without seeing the prices, you don’t know what your opportunities are in the marketplace,” said Jessica Brooks, chief executive officer of the Pittsburgh Business Group on Health.
The new study compared median prices for 13 radiology services that are often scheduled in advance, giving patients time to comparison shop.
Researchers used data as of Sept. 6 from technology startup Turquoise Health Co., which had reviewed about 5,700 hospitals at that time. The study was funded by Arnold Ventures LLC, which sponsors healthcare research.
A computed tomography, or CT, scan of the head had one of the largest gaps between the least expensive hospitals, which charged a median price of $199 or less, and the priciest, which had median prices of $1,882 or higher.
Cost difference can’t explain the price spreads, said health researchers not involved in the study, because imaging is largely standard. Other factors that determine prices, the researchers said, include negotiating skills or how much leverage hospitals have in contract talks with insurers.
“I guess most of it would be summarized in two words: market power,” said Ateev Mehrotra, a Harvard Medical School professor whose 2019 research on privately insured California patients found imaging spending would drop 45% if patients paid the median price instead of prices in the top 50%.
Many hospitals didn’t have public prices for the imaging scans, the Radiology study also found. Researchers said roughly 1,700 to 2,200 hospitals had publicly displayed imaging prices, depending on the service.
Hospitals without the service aren’t required to post the public price. Some have updated prices in the months since the rule took effect.
“The majority of the hospitals still stay in the black box,” Dr. Bai said. “The employers won’t be able to take advantage of any of the disclosed information.”
The Biden administration this month said it would raise the penalty to up to $2 million for hospitals that don’t make prices public. It also banned the use of code embedded in webpages that excluded hospital pricing pages from results using search engines such as Alphabet Inc.’s Google, after The Journal described the practice.
Consumers need all prices to get a clear picture of the market, health researchers said. “The real just unknown here is what do prices look like for the half of hospitals that aren’t reporting?” said Christopher Whaley, a health economist at Rand Corp. who studies hospital pricing.
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