Prices for common medical tests like mammograms and MRIs are notoriously opaque. Negotiated rates between insurance companies and doctors or hospitals are sealed tight by contract. We know there's price variation, but comparing what one insurance company pays versus another is virtually impossible. That's why we here at KQED in San Francisco turned to members of our audience to help us find out what medical tests and devices cost....How can market functions hold costs down if we have no way of comparing the costs? Competition doesn't work at all in an environment like this.
We thought we would find variation, and indeed we did. In California, commercial insurers paid from $128 to $694 for a screening mammogram. In Los Angeles, one woman's insurer paid $600 more than the lowest-cost screening mammogram reported in the area. "I'm sure every woman who's had a mammogram had the exact same experience I did," this woman said. "It was a friendly technician, but I don't think that's worth maybe 600 extra dollars."
In lower-back MRIs, we found that for CPT code 72148, insurers paid from $467 to $1,567. But when we looked beyond commercial insurers, we found even greater variation — from a low of $255 to a self-pay price of $6,221 at an academic medical center. That $255 MRI was paid by Medicare, and was just a fraction of the facility's charge of $2,450.
Price Signals Work
At least, they work if they aren't entirely hidden from the consumer.
By Grim on Wednesday, November 19, 2014