Castlight Health: Pricing for Medical Services Is All Over The Map
Castlight Health has published its second annual U.S. Costliest Cities Analysis, which shows astonishing variation for prices of medical procedures. This year’s report focuses on women’s preventive health:
Mammogram. Nationwide for a mammogram, a woman could pay anywhere from $43 to $1,898 for the test, a 44x difference. With some of the country’s largest cities, the clear indication is that women in larger metropolitan areas are being charged wildly varying amounts for a critical preventative test. For example:
- In Dallas, which has the nation’s widest range, a woman could pay anywhere from $50 to $1045, roughly a 21x difference.
- In New York City, the price can vary between $130 to $1,898, roughly a 15x difference. New York also has the most expensive mammograms in the entire country.
- In Los Angeles, a simple mammogram could cost anywhere from $86 to $954, an 11x price variance.
- The San Francisco Bay Area ranged from $129 to $860, a 6x difference.
OB/GYN Follow-Up Visit. Minneapolis and Seattle were the most expensive cities for an OB/GYN follow-up visit, and Phoenix and Las Vegas were the cheapest.
Preventative Gynecological Exam. The San Francisco Bay Area was the priciest for both a preventative gynecological exam and an HPV test, where it was on average 6x more expensive than Charlotte, NC for both.
HPV Test. In Philadelphia, the price of an HPV test ranged from $32 to $626, a 19x difference.
While politicians pass ineffective laws mandating price transparency, businesses like Castlight are actually doing something about it. Castlight does not delve into the reasons for these. The problem is that women do not pay for these services directly. They pay through premiums and depressed wages. So, there is no pressure to reduce the variance of prices. I would suggest the problem is worse for these women’s services, because they are usually offered as preventive care (with no direct payment) so most women are utterly insensitive to prices.
It’s frustrating that both providers and insurers continue to lobby hard and successfully to keep contract reimbursement rates confidential. Even getting a binding estimate of out-of-pocket cost, especially from a hospital, for a service, test or procedure can be problematic.
For people with high deductible insurance plans who care about costs, they should make it known to their doctor that they have a high deductible and cost is an issue for them. Most patients either already know or will know soon that the most expensive places to get care are hospitals and hospital owned facilities. It shouldn’t be hard for patients to ask for referrals to independent, non-hospital owned providers when possible. Unfortunately, salaried doctors who work for hospital systems often have their bonus at least partly determined by how much care they are able to keep within the hospital’s system and by relative value units billed. Both metrics are in direct conflict with patients’ interest in cost-effective care. I don’t have any good ideas on how to change that.
It is a tough nut to crack. In this blog, I have proposed what I call a “common-law” approach to a solution for price transparency.
Yes, no reason to check a price comparison tool if the service is free to you. Carriers, therefore, reduce their network of providers who offer these benefits to only those with low prices. Then refuse to pay for any of these services if procured from an out of network provider.