Price Consistency Could Save Health Care System $36 Billion
Reducing price variation in health care for the 108 million Americans with employer-sponsored coverage could save the nation as much as $36 billion per year. A recent Thomson Reuters white paper this week further confirms many other reports showing wide variation in price for the same medical procedure in different markets. Price disparity in medical imaging is the subject of the cover story in this month’s Radiology Business Journal. The latest white paper from the research arm of Thomson Reuters found that in some circumstances prices for medical services could be three times higher at a hospital setting compared to an outpatient facility. Prices can be widely different among hospitals in the same city as well. An insurer in Detroit might pay around $900 for an MRI of the spine at one hospital and $1,500 at another hospital across town, the report found. Based on several studies looking at price variation, the Thomson Reuters report found that if the prices for a given procedure were lowered to the median price in that market, around 3.5% of health care costs could be saved.