They Want It to Be Secret: How a Common Blood Test Can Cost $11 or Almost $1,000
Both of these are real, negotiated prices, paid by health insurance companies to laboratories in Jackson, Miss., and El Paso in 2016. New data, analyzing the health insurance claims of 34 million Americans covered by large commercial insurance companies, shows that enormous swings in price for identical services are common in health care. In just one market — Tampa, Fla. — the most expensive blood test costs 40 times as much as the least expensive one.
If you’re a patient seeking a metabolic blood panel, good luck finding out what it will cost. Although hospitals are now required to publish a list of the prices they would like patients to pay for their services, the amounts that medical providers actually agree to accept from insurance companies tend to remain closely held secrets. Some insurance companies provide consumers with tools to help steer them away from the $450 test, but in many cases you won’t know the price your insurance company agreed to until you get the bill. If you have an insurance deductible, a $400 — or even a $200 — bill for a blood test can be an unpleasant surprise.
Outside of health care, a swing of prices as huge as the one for blood tests in Tampa is unheard-of. Recent studies of the retail prices of ketchup and drywall, for example, showed much less variation. A bottle of Heinz ketchup in the most expensive store in a given market could cost six times as much as it would in the least expensive store. But most bottles of ketchup tended to cost around the same. And, in every case, you would know the price of your ketchup before buying it.
“It’s shocking,” said Amanda Starc, an associate professor at the Kellogg School of Management at Northwestern, who has studied the issue. “The variation in prices in health care is much greater than we see in other industries.”
Hospitals and insurers negotiate over prices in private, and they don’t want competitors to know about the deals they’ve been able to cut. The data in this article comes from the Health Care Cost Institute, which pools bills from three large insurance companies. (Even the institute can’t say which insurers and providers are attached to the different prices, and it has eliminated certain markets with less competition where it might be easy to guess.)
The Trump administration may eliminate this secrecy, making numbers like the ones in these charts more common and easier to find. As The Wall Street Journal has reported, the administration has asked for comments on a proposal to require doctors and hospitals to publish negotiated prices.