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- Hospital Prices Vary Across U.S.
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Hospital Prices Vary Across U.S.
Travel is high during the holiday season, increasing your chances of visiting an out of state hospital. If you do need to seek medical care, don’t expect to pay the same as you would back home.
A new study reports that the cost of medical care varies widely across the nation. The cost of medical care is negotiated by hospitals and insurance companies. Prices at hospitals in monopoly markets, markets where there are few options for hospital care, is 15% higher than those at hospitals in areas with at least four providers.
The recent study showed that the cost of lower-limb MRIs performed in 2011 was 12 times more expensive in a borough of New York City than in Baltimore. The study also found that prices varied even within the same city.
“These price differences between hospitals can be thousands of dollars,” study co-author martin Gaynor, a professor of economics and health policy at Carnegie Mellon University, said in a Yale University news release.
“For example, the price of an average inpatient stay where there’s a monopoly hospital is almost $1,900 higher than where there are four or more competitors. We know that these higher prices end up getting translated into higher premiums that employers pass on to workers, Gaynor said.
The study was published on the Health Care Pricing Project website.
“The fact that prices are so high and can vary so much for hospital treatments of the same costs and quality is simply mind-boggling to foreign observers of the U.S. health care system,” study co-author John Van Reenen, professor of economics and director of the Centre for Economic Performance at the London School of Economics, said in the news release.
The conduct the study, researchers looked at data on spending for about 30% of people in the U.S. with employer-sponsored health insurance coverage. The study included research on 92 billion health insurance claims from 88 million people insured by Aetna, Humana and United Health.
What’s to blame for the price discrepancy? Researchers believe it’s due to the amount of mergers in the health care industry.
“There have been over 1,200 mergers in the hospital industry since 1994, and 457 since 2010. Our work shows that the consequences of this wave of mergers can be dire for consumers. There’s a real need for continued vigorous antitrust enforcement and other policy options to encourage competition and combat market power,” Gaynor said.
Research showed that the spending patterns for privately insured people varied significantly from that of people on Medicare.