Consumers looking to buy a new car or a computer can shop around for the right price, but when it comes to health care, it's difficult to even find out ahead of time how much a procedure will cost. And when patients do find out, the cost can vary by thousands of dollars, depending on the hospital, according to a study released on Monday.
Researchers at the University of Iowa set out to see if they could learn, and then compare, the price of a common procedure -- hip replacement -- at hospitals across the United States. Of those they surveyed, only 16 percent could immediately provide a complete price, including the doctor's fees and hospital costs, for the procedure. And 47 percent of the hospitals came up with a figure only after health care providers were separately contacted.
When price estimates for the widely performed procedure were given, they ranged from $11,100 to $125,798, reported the study, which was published by the Journal of the American Medical Association in its publication, JAMA Internal Medicine.
“Hospitals still have a long way to go to provide total transparency in pricing,” Jaime Rosenthal, one of the study's authors, told NBC News. “It was surprising, we either didn’t get the information, or it was extremely difficult to get.”
Rosenthal, of the University of Iowa Carver College of Medicine, in Iowa City, and colleagues randomly selected two hospitals from each state and Washington, D.C., that perform total hip replacements, as well as 20 top-ranked orthopedic hospitals, to request the “bundled price” for the procedure for an uninsured patient with the financial means to pay out of pocket. She said they chose to survey hospitals on hip replacement because it is a common procedure with over 200,000 performed each year in the U.S.
“We found that price estimates varied nearly 10-fold across hospitals, which is surprising considering that all hospitals were provided with standardized information about the procedure being requested,” researchers wrote in the study.
According to the results, nine top-ranked hospitals (45 percent) and 10 non-top-ranked hospitals (10 percent) were able to provide a complete bundled price. Researchers also were able to obtain a complete price estimate from an additional three top-ranked hospitals (15 percent) and 54 non-top-ranked hospitals (53 percent) by contacting the hospitals and physicians separately.
At top-ranked hospitals the complete price ranged from $12,500 to $105,000 and at non-top-ranked hospitals prices ranged from $11,100 to $125,798, according to the study results. “Our results demonstrate that many health care providers are not able to provide reasonable price quotes,” the study concludes.
“There is no justification for the inability to report a fee estimate, or a 12-fold price variation for a common elective procedure like a hip replacement,” wrote Andrew Steinmetz and Dr. Ezekiel J. Emanuel of the University of Pennsylvania, in a related commentary to the study.
A spokeswoman for the American Hospital Association said that sharing price information about procedures is difficult because "hospital care is unique and based on each individual patient’s needs. Additionally, patients’ final out-of-pocket costs could can be higher or lower than their neighbors’ – even when they’ve undergone the same procedure – depending on their type of insurance. To get the most meaningful information, we encourage consumers to talk with their physician, hospital and insurance company."
Dr. John Santa, who heads the magazine Consumer Reports’ Health Ratings Center, said the study highlights a problem with the U.S. health-care industry. “Consumers have no option but to shop around … doctors won’t tell you the price until they know the (patient’s) insurer and the type of coverage.”
He compared it to the used-car business. “They only want to know what you can pay," he said. "At least when you are buying a car, you can walk away.”
Dr. Jeffrey Rice, a former physician and attorney in Nashville, Tenn., says it's traditionally been difficult for patients to find and compare prices on health care services. He set up a group called Healthcare Blue Book to help people compare prices. According to his data, the cost of a hip replacement can vary from $19,500 to $43,875, with a “fair” price of $21,148.
“Typically, many hospitals can’t give price estimates, certainly not binding ones,” he said. “If you are buying a new computer or a cell phone, you know what you’re looking for, but with hip replacement you don’t even know where to start.”
Another consumer advocacy group, Public Citizen, noted that health care costs in the United States are higher than in any other industrialized nation. “Some people argue that the free market is the way to go,” said Dr. Michael Carome, who is deputy director of Public Citizen’s Health Research Group. “But in a free market you can compare (prices).”