Stethoscope and dollar Pricespaid by UnitedHealth's commercial health plans, based on claimsfrom 12.5 million tests, varied from three-fold up to 24-fold ormore for different types of tests. (Photo: Shutterstock)

|

U.S. consumers could save more than $18 billion a year ifproviders stopped overpricing their diagnostic and testingservices, according to a new report from UnitedHealth Group (UHG). Theinsurance giant said it found prices can vary significantly for common tests such as MRIscans and echocardiograms.

|

“This price variation leads to gross overspending for manyconsumers, even for common health care services such as diagnostictests, which play an important role in the diagnosis, monitoring,and treatment of disease,” the report said.

|

Related: My wife's story: Anatomy of an insane health carebilling system

|

As an example, the report noted that in 2017, an echocardiogramcost nine times as much at the facilities charging the highestprices than it did at facilities with the lowest prices. The reportnoted that prices for echocardiograms varied from $210 to $1,830,based on 2017 data. Some patients paid prices on the lower end ofthe scale, but more than half paid the median price—$480—ormore.

|

The report added that geographic differences did not seem to explainthe variation in prices, nor did the higher costs come withincreased quality or better outcomes.

|

“Rather than cost or quality primarily driving price variation,a more likely reason is that health care providers generally areincentivized to use their market power to increase prices, oftenresulting in overpriced services,” the report said.

|

Overpricing a range of services

The report looked at seven types of common, minimally invasivediagnostic and testing services for patients. It found that pricespaid by UHG's commercial health plans, based on claims from 12.5million tests, varied from three-fold up to 24-fold or more fordifferent types of tests. The UHG analysis said that if all thetests that were priced above the 40th percentile were re-priced tothe 40th percentile, prices for the services would have cost $18.5billion less, a 49 percent savings.

|

The study's authors extrapolated these numbers from its claimsdata to calculate the results for all commercial claims for theseservices in the US. “By reducing price variation, many patientswould pay less out-of-pocket costs and health insurance premiumscould be lower,” the study said.

|

Prices can vary widely even in the same metro area

The analysis by UHG fits with a study released April 30 by theHealth Care Cost Institute (HCCI), which saidprices showed a 25-fold variation for the same services, and foundthat there could be significant variation within the samemetropolitan area.

|

“It is highly unlikely that these pricing differences arerelated in any meaningful way to differences in quality or value,”Niall Brennan, president and CEO of HCCI, said in a statement.“Employers should be outraged that they and their employees may bepaying radically different prices based on factors like whichprovider they go to.”

|

Read more: 

 

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com