Examples of Price Variation in Healthcare Services

Consistently, the most expensive services can be up to 15x more than the least expensive.


by David Gaines

Want to know why America has the most expensive and unequal healthcare system in the developed world?

Look at the graphs from real health plan transactions below:

These are actual total paid prices from real commercial health plans for 3 different healthcare services – a chest image, a blood count, and a lower GI endoscopy. Consistently, the most expensive of these services can be up to 15 times as costly as the least expensive.

Today, most health plans and ACOs don’t measure the extent to which they are overpaying for these services as a metric for performance. From these graphs you can see that not managing this type of variation leaves a lot of money on the table. Arbitrating these opportunities through network, navigation, incentives, referrals, and UM will always be the largest cost saving opportunities for any health plan or ACO.

At Careignition, we process and set up healthcare data so these issues are automatically brought to stakeholders’ attention, are clear to see, have automated actionable recommendations for improvement, and ultimately, become more manageable.

When I see these numbers, I often don’t believe them… However, after I double check them, they are correct. The same commercial endoscopy really can range from $1,000 to $16,000 per encounter.

Who would have thought you can save a Honda Accord’s worth of money by driving 20 miles…

*To note, these are units that have gone through Careignition’s service and encounter standardization process to ensure we are comparing apples-to-apples.

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