Reform Needed for Consistent Pricing

I recently came across an article which detailed a summer research project on health care costs. It was conducted by a student, who called over 100 hospitals across the country. The inquiry involved a fictitious grandfather who needed hip replacement surgery. The patient did not carry insurance for such a procedure, but professed the financial strength to privately pay for the operation.

What Are We Paying for?

The research findings revealed a “black hole” in the medical system and resources within the United States. Only about half of the hospitals, including top-ranked orthopedic centers and community hospitals, could provide any sort of price estimate, despite repeated calls. And of those facilities which did define the costs involved in such a surgery, the estimated costs varied by a factor of more than 10. The range of expense covered from a low of $11,100 to the upper level of $125,798. — for the same surgical procedure. Think about that. If you were buying a nice, new sports utility vehicle, wouldn’t you be a bit surprised to discover the cost might range from $20,000 in one state and be priced to sell at $90,000 in another state?

The chief executive of Healthcare Blue Book, a company that collects data on medical procedures, was quoted as saying: “We’ve been trying to help patients get good value, but it is really hard to get price commitments from hospitals – we see this all the time. And even if they say $20,000, it often turns out $40,000 or $60,000.”

Research also emphasized that studies have found little consistent correlation between higher prices and better quality in U.S. health care. There was no significant data to show that “expensive” hip implants were better than “cheaper” surgical hip replacement.

These findings beg the question: shouldn’t there be some kind of consistent pricing for similar medical interventions across the country? As one executive from a consumer watchdog organization stated: “If one hospital can put in a hip for $12,000, then every hospital should be able to do it.”