Large variations in hospital pricing for standard procedures revealed

Abstract

Objective: The CMS mandated hospital price transparency reporting on January 1, 2021 aiming to empower patients, enhance market competition, and curtail healthcare costs in the US. We aimed to characterize variability in hospital pricing reported by 1982 hospitals on six standard procedures (including abdominal ultrasound, diagnostic colonoscopy, kidney function blood test panel, knee arthroscopic cartilage removal, magnetic resonance imaging scan of brain, and pelvis computed tomography scan with contrast), with a particular focus on variations in pricing by insurance plan type. Results: We found substantial heterogeneity across insurance plan types. The minimum number of prices reported was 18,679 for knee arthroscopic cartilage removal (reported by 908 hospitals, average = 21 prices/hospital), while the maximum number of prices reported was 44,921 for abdominal ultrasound (reported by 1861 hospitals, average = 24 prices/hospital). In general, reported hospital pricing was highest for the list price, followed by cash price and prices negotiated with commercial insurance plans. Government insurance, including Medicare, Medicaid and Veterans/Tricare plans, had much lower prices. However, prices were very heterogeneous with substantial overlaps between pricing for all plan types. The coefficients of variation for all procedures exceeded 100%, ranging from 106% for knee arthroscopic cartilage removal to 397% for kidney function blood test panel.