Price transparency absent, costs $36B a year

Wide variations in the cost of highly utilized procedures lead to tens of billions of dollars a year in overspending on healthcare services.

A new white paper by Thomson Reuters focused on 300 well-known and "shoppable" non-emergency procedures such as mammograms, MRIs or knee replacement surgeries. In some instances, the procedures cost as much as three times more in one market compared to another.

One particular example: a C-section delivery of a newborn ranged in price between $7,481 and more than $16,000 among Detroit-area hospitals.

"In real world terms, this data tells us that an individual consumer going in for a surgical evaluation of a knee joint with a standard high-deductable insurance plan can expect to save between $200 and $500 by going to a provider who offers the service at or below median price. The cost savings potential ... [is] staggering," said Bobbi Coluni, a Thomson Reuters senior director and author of the white paper, in a prepared statement.

If the procedures were obtained at the lowest price, healthcare spending would be reduced by about $36 billion a year, the report concluded. It did not find any variations in quality that approached those of price.

The paper called for greater price transparency for consumers, noting that costs for services delivered in an office setting were often far less than those delivered in a hospital. Such transparency would likely encourage more "shopping" by consumers, it added.

For more information:
- read the Thomson Reuters white paper
- here's the press release