Prices of some medical services in Charlotte are 20 percent higher than the national average, according to a new study that contributes to the national push for transparency in health care costs.
The study, published in the journal Health Affairs, was the work of economists and analysts at the Health Care Cost Institute, a Washington-based nonpartisan research group with access to a national database of nearly 3 billion private insurance claims.
Researchers looked at more than 240 common medical services in 41 states and the District of Columbia and found that health care reimbursements in some states are more than double what is paid in others.
Charlotte’s average prices for certain procedures, especially imaging services such as CT scans and MRI tests, were not only higher than the national average in many cases, but also higher than the state average and higher than prices in Raleigh, the state’s second-largest city.
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For example, the average cost for an ultrasound that is commonly performed during pregnancy is $275 nationally. The North Carolina average is a little higher at $372. But the average in Charlotte is almost twice the national average – $508. By contrast, the average price in Raleigh is $264.
Executive director David Newman said HCCI’s mission is to encourage public reporting and transparency when it comes to health care costs. This is especially important in an era of rising premiums, deductibles and co-pays for health insurance, putting more of the financial responsibility on individual customers.
“It’s not that all high prices are bad,” Newman said. “Maybe the price is high because the service isn’t readily available. Or maybe the price is high because the provider has market power.”
In Charlotte, the state’s largest urban area, availability of services is not typically the problem. But market power could be a determining factor.
As multiple studies have shown, the consolidation of hospitals and doctors’ groups into large systems almost always leads to higher prices. That’s because their size gives them leverage when it comes to negotiating ever-higher payments from private insurance companies, which need the large health care providers in their networks.
Charlotte is dominated by two major hospital groups – Carolinas HealthCare System and Novant Health – which own all the hospitals in the county and most of the doctors’ offices.
I spent some time reviewing HCCI’s consumer-focused website, www.guroo.com, to see how North Carolina fares. Here are more examples:
▪ For a CT scan with dye, the average cost nationally is $799. The North Carolina average is $1,016. In Charlotte, the average is $846, and in Raleigh, $583.
▪ For an MRI of the brain without dye, the average cost nationally is $786. The North Carolina average is $1,458. In Charlotte, the average is $1,330, and in Raleigh, $1,093.
▪ For an MRI of the lumbar spine without dye, the average cost nationally is $716. The North Carolina average is $1,218. The Charlotte average is $1,396, and Raleigh’s is $713.
▪ For an MRI of the cervical spine without dye, the average cost nationally is $715. The North Carolina average is $1,259. The Charlotte average is $1,323, and Raleigh’s is half that – $696.
▪ For a knee replacement, the average cost nationally is $35,543. North Carolina’s average, $40,602. Charlotte’s average was higher than either the national or state average, at $46,229.
▪ For vaginal childbirth and newborn care, the average cost nationally is $12,485. North Carolina’s average, $13,796. Charlotte’s average, $15,016.
▪ For colonoscopy with polyp removal, the average cost nationally is $2,692. North Carolina, $2,366. Charlotte, $2,531.
The averages do not include claims from Blue Cross and Blue Shield of North Carolina, the state’s largest private insurer. Newman said none of the Blue Cross plans in the country participated in the study; the major participants were Humana, Aetna and UnitedHealthcare.
Lew Borman, a Blue Cross spokesman in North Carolina, said Blue Cross members can use the company’s cost comparison tool to get plan-specific estimates of what a procedure will cost.
Newman said the goal for HCCI is that other researchers, policy makers and health care providers would answer this question: “Why do prices for the same service differ markedly across distances of only a few miles, and what amount of that difference is justifiable?”
More information about health care costs
▪ Health Care Cost Institute: www.guroo.com. Available to the public, gives average prices for states and some cities.
▪ Aetna: www.aetna.com. Members-only cost comparison tool, gives estimated prices based on Aetna claims paid for hospital care by ZIP code.
▪ Blue Cross and Blue Shield of North Carolina: www.bcbsnc.com. Members-only cost comparison tool, gives estimated prices based on Blue Cross claims paid for hospital care by ZIP code.