Health care prices vary wildly: What can you do?

It’s a frustrating reality of the medical marketplace: Prices are all over the map.

If you need an angioplasty to treat heart disease in Birmingham, Ala., it will cost about $15,500. But the identical procedure in Sacramento will cost four times as much.

And even within the same Boston-area market, the price of removing a common type of skin cancer can vary by hundreds of dollars depending on which hospital you go to.

Prices vary wildly from city to city and hospital to hospital for all sorts of medical care, and it’s nearly impossible to get a straight answer ahead of time on what you’ll pay. That means real consequences for family budgets now that consumers must pick up a greater-than-ever share of the health care tab.

New Hampshire patient advocate Dave deBronkart spent three months shopping for care and researching costs before being treated for basal cell carcinoma on his jaw line three years ago. Facing a $10,000 insurance deductible that he had to pay before insurance kicked in, he examined options for treatment at three different Boston-area hospitals.  He was told that one treatment, an excision, would cost up to $2,062 at one hospital, up to $2,500 at another and up to $4,010 at a third. Prices for other treatments also varied substantially by hospital.

“There can be no explanation other than some secret malarkey going on,” says deBronkart, 65. “I feel disempowered and disrespected, because aside from the incredible cost crunch we’re all experiencing, it’s a downright sin that my family can’t readily find out what the options are and what the costs are.”

Nothing has changed, he says, since Princeton University health care economics scholar Uwe Reinhardt wrote his famous 2006 article in the journal Health Affairs captured perfectly by its title:  “The Pricing of U.S. Hospital Services: Chaos Behind a Veil of Secrecy.”

The most recent of many studies examining the issue looked at angioplasties. The Blue Cross Blue Shield Association and Blue Health Intelligence analyzed three years of company claims data in 86 of the 100 largest metropolitan areas among patients getting elective (not emergency) angioplasties, which use a balloon to widen a narrowed artery and restore blood flow. About a million of these are performed each year, making them a top 10 contributor to health care costs.

After controlling for the overall costliness of an area, researchers still found huge differences from city to city and within the same market. For example, costs varied by 381% from hospital to hospital in Southwest Illinois — and higher cost didn’t equate to better quality within a market, says BCBS Chief Medical Officer Trent Haywood.

Other reports have described the same place-to-place, hospital-to-hospital cost differences for knee and hip replacements, a chemotherapy injection used to treat lymphoma and leukemia and a number of other procedures and services.

Experts cite many reasons, such as the cost to operate a hospital, the mix of public and private insurance there and reimbursements negotiated between insurers and providers. In the past, much of this remained hidden from consumers. But it's become painfully clear since deductibles rose nearly 50% from 2009 to 2014 and patients also must pay "co-insurance," a portion of covered costs beyond that. And costs are higher if they choose a provider not in their insurance plan's network.

Nearly 10 million people have paid for Obamacare plans

In the case of angioplasties, BCBS officials say patients are typically on the hook for about 20% of overall costs. So if the procedure costs $22,000 at one hospital, BCBS says, out-of-pocket costs may be just over $4,000 , compared with around $6,000 at a hospital where the procedure costs $44,000 and the consumer has a single coverage plan with a $6,000 out-of-pocket maximum.

“The whole paradigm has shifted,” says Robin Gelburd, president of FAIR Health, a not-for-profit health data corporation that promotes transparency in health care costs. Consumers used to play “a supporting role” to employers and health plans when it came to sorting out cost information. Now, she says, they must navigate the confusing world of cost sharing, high-deductible plans, in- and out-of-network care and all the different physicians who might bill you for a procedure.

So what’s a consumer to do? Advocates say one strategy is to use some of the new Internet tools available:

• Hospital Pricing Specialists has free reports  comparing the cost of various services such as colonoscopies and appendectomies. 
• Clearhealthcosts.com  shows prices in certain areas, and insurers often have price-comparison tools available to their members.
• Fair Health,  which also is available in Spanish,  offers online medical and dental cost lookup tools plus other health care resources.
• The Centers for Medicare and Medicaid Services has released information on average charges for 100 common inpatient services at more than 3,000 hospitals across the nation.
• About 90% of insurance plans — including those offered by Aetna, BCBS and other insurers — have costs calculators for members, according to America’s Health Insurance Plans. 

Aetna says its members who use their price-comparison tool save save about $170 in out-of-pocket costs compared with the average of estimates they received.

Obamacare reduces maximum out-of-pocket costs, but not enough for some

In deBronkart’s case, after his exhaustive research, he wound up getting a treatment no one had told him about until he got into his doctor’s office. Known as ED&C, it involved scraping off the lesion, took 15 minutes and cost $685. While he was glad it didn’t cost as much as he expected, he says there’s no excuse for the rampant price variation and inability to easily shop for options and prices.

“America is a consumer-driven society. I love making my own decisions,” he says. “Now, we can’t even tell if we’re getting a good deal on our own terms.”