The old adage “location, location, location”—meaning location is everything—doesn’t apply to health care expenditures. A new study indicates regional disparities in the cost of certain procedures, with patients paying up to 683% more for the same procedures, in the same town, depending on the provider that administered them.
Change:healthcare, the national health care group that conducted the study, examined claims for 82,000 employees of small businesses submitted between May 2010 and May and May 2011. Within one town in the Southwest, charges for a pelvic CT scan ranged from $230 to $1,800. Similarly, a brain MRI in a Northeastern U.S. town was found to cost $1,540 when conducted by one provider and $3,500, when conducted at a different imaging center.
Howard McClure, CEO of Change:healthcare says health plans are moving toward "reference-based pricing," in which they look at the average price of a procedure for a region, then inform patients that “that is all they'll reimburse.” However, patients who do not know how much a procedure costs must shoulder the remainder of the bill if it exceeds that average price.
Read the study.—Julie Ritzer-Ross