How consistent is the pricing of health services?

According to a study published on October 27 in JAMA Health Forum.

The findings highlight how important it is for patients to understand price variability in health care, wrote a team led by Benjamin Chartock, PhD, of Bentley University in Waltham, MA.

“Enlightened healthcare consumerism is a potential lever for managing costs and improving patient satisfaction,” the group noted.

More than half of Americans have private health insurance, for which prices are negotiated rather than set by an entity such as Medicare, the study authors said. This negotiation helps ensure that private insurance prices are often higher than Medicare and variable rates, they said. Despite the adoption of policies to clarify health care pricing, there is still work to be done.

“The private market lacked meaningful price transparency for patients and purchasers until the recent implementation of the Hospital Price Transparency and Transparency of Coverage (TiC) rules. [and lack] Lack of transparency limits the ability of regulators to monitor prices and the ability of employers, patients and purchasers to impose market discipline on prices,” they wrote.

Chartock’s group sought to study variations in health services using 2022 TiC price data from Humana (which primarily offers Medicare Advantage benefits, but also covers about a million people with insurance commercial). The group focused on seven procedures, including what it called “shoppable” services, such as non-contrast head or brain CT scans and lower extremity MRI scans, and less “shoppable” services. » such as emergency room visits for acute conditions. Investigators analyzed differences in price distributions (i.e., mean, median, and percentiles) and coefficients of variation.

Researchers found geographic differences in health care prices, with average county-level prices lowest in the central United States and Florida, and highest in the upper Midwest and Southeast. . They also noted the following variations in services:

According to the authors, more research needs to be done to determine the reasons for variations in health service prices.

“Future work could examine the underlying causes of price variation in health care, as it is unclear whether prices are significantly associated with value as in almost all markets, or whether prices reflect imbalances in market power and bargaining leverage,” they concluded. “If price variation reflects variation in clinical or perceived quality, purchasers and policymakers must strike a balance between receiving higher quality care and spending financial resources elsewhere. However, if price variation is driven by consolidation or anticompetitive contracts, then regulators must design policies that ensure competitive healthcare markets.

The full study can be viewed here.