Study Finds Patient Cost for MRI Largely Unrelated to Overall Price or Insurer Contribution at 14 MA Hospitals

Share on Facebook
Share on Twitter
Share on

Read coverage of this report in WCVB-TV, Boston Herald, the Boston Business Journal, the Worcester Telegram and Gazette, and FierceHealthcare.

Authors recommend greater transparency and financial incentives for patients to choose lower-cost, high-value providers

BOSTON – There is little correlation between a patient’s out-of-pocket cost and either the amount insurers pay or the overall price of a procedure at 14 representative Massachusetts hospitals, according to a new study published by Pioneer Institute.

“Even if patients don’t see differences in out-of-pocket prices among hospitals, higher utilization of more expensive providers drives up the cost of care, which puts upward pressure on insurance premiums,” said Barbara Anthony, co-author of “Wildly Varying MRI Prices at Massachusetts Hospitals: Why We Need Access to Healthcare Prices at All Levels.”

The total price (insurance payment plus patient contribution) of an MRI of the knee without contrast ranged from $476 at St. Vincent’s Hospital in Worcester to $1,423 at Boston Children’s Hospital.  Patient out-of-pocket prices ranged from $55 at Mt. Auburn Hospital to $206 at South Shore Hospital.  Insurer payments for the procedure were just $352 at New England Baptist Hospital in Boston, but $1,236 at Children’s.

Even though patients paid $55 for an MRI at Mt. Auburn Hospital and $206 at South Shore, the total price of the procedure was very similar at the two hospitals.  New England Baptist patients paid about 30 percent of the price of the MRI, while patients at Tufts New England Medical Center and Mt. Auburn paid less than 10 percent of the total.

Anthony and co-authors Scott Haller and Kaila Webb recommend coupling price transparency with financial incentives for consumers to choose lower-cost, high-value providers. The Massachusetts Group Insurance Commission, Harvard Pilgrim Health Care and Blue Cross Blue Shield have programs that help members identify such providers and then in some way share part of the savings with them. The assumption is that insurers want to move members towards lower overall cost providers.

The study is based on data obtained from the Massachusetts Center for Health Information and Analysis (CHIA) and its all-payer claims database (APCD).  It includes all MRIs of the knee without contrast conducted in May 2015 at the 14 facilities, which are geographically diverse and represent both teaching and community hospitals.

The authors also call for opening the APCD to the public and they recommend that state and industry leaders undertake a substantive, ongoing campaign to educate the public on the importance of healthcare price transparency.

“This study demonstrates once again the pervasive existence of wide variations in healthcare prices that cannot be explained by cost, acuity or quality,” said Jim Stergios, executive director of Pioneer.  “In addition, it shows that overall price is still dominated by institutions with the clout to extract higher prices from insurance companies, and the lack of real consumer price transparency perpetuates this situation,” he added.

About the Authors

Barbara Anthony, a lawyer, is a senior fellow in healthcare at Pioneer Institute focusing on healthcare price and quality transparency.  She is formerly an associate at the Harvard Kennedy School’s Center for Business and Government.  She served as Massachusetts Undersecretary for Consumer Affairs and Business Regulation from 2009 to 2015.

Scott Haller graduated from Northeastern University with a Bachelor’s Degree in Political Science. He started working at Pioneer Institute through Northeastern’s Co-op Program and then as the Lovett C. Peters Fellow in Healthcare. He previously worked at the Office of the Inspector General.

Kaila Webb is a Jane & Steven Akin Digital Media Fellow for Pioneer Institute. She is as a Wellesley College student majoring in Chinese Lan­guage & Culture and Environmental Studies, and serves as Stu­dent Director of the Freedom Project. Her research focuses on healthcare policy, environmental development, and public transit.

About Pioneer

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectu­ally rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and effective government.

Get Updates On Our Healthcare Cost Transparency Initiative!

Related posts:

Study: Massachusetts Should Join 45 States and Allow Prescribers to Dispense Medications

A Pioneer Institute study shows that middlemen—commercial pharmacies and pharmacy benefit managers—add substantial costs over wholesale prices. Allowing prescribers to dispense routine drugs would save consumers money without compromising safety.

Survey Finds Spotty Compliance Among Hospitals with Federal Price Transparency Law

A 2019 federal law requires hospitals to make prices for 300 shoppable services available online in a “consumer-friendly format,” but a Pioneer Institute survey of 19 hospitals finds that information on discounted cash prices—the price most likely to be charged to consumers paying out of pocket—was unavailable at seven of those hospitals.

Pioneer Institute Statement on the Commonwealth’s Discontinuance of the COVID-19 Weekly Public Health Report

Useful information about COVID cases or deaths at individual homes has become less available at a time when cases are increasing again, even among vaccinated residents. Pioneer urges Massachusetts to immediately reinstate the so-called Weekly Report, which contains cases and deaths inside individual nursing homes.

Study Calls for Better Reporting on Impact of COVID-19 in Eldercare Facilities

Over time, the Massachusetts Executive Office of Health and Human Services and Department of Public Health (DPH) have improved reporting about cases and deaths from COVID-19 in state-regulated eldercare facilities, but flaws and omissions remain and should be corrected, according to a new study published by Pioneer Institute.

Survey: Consumers Want Healthcare Price Information, But Few Realize It’s Available

Great strides have been made to increase healthcare price transparency through online cost estimator tools and a state law that requires providers to give out price information. Yet despite the eagerness of consumers to access prices and out-of-pocket costs, many are unaware that such information is available and don’t know how to access it, according to survey results published by Pioneer Institute.

Study: Shift from Highest-Priced Healthcare Providers Would Generate Tremendous Savings

Consumers in just one Massachusetts county could have saved nearly $22 million in a single year and $116.6 million adjusted for inflation over four years if they switched from using the most expensive providers for 16 shoppable healthcare services to those whose prices were closer to average, according to a new study published by Pioneer Institute.

Pioneer Urges Future COVID-19 Study and Recommendations Task Force to Consider Impact on Nursing Home Residents

After over 5,000 people have died of COVID-19 in Massachusetts nursing homes, Pioneer Institute is issuing an open letter to the state’s future COVID-19 health equity task force that outlines an extensive list of recommendations on infection control and preparedness in eldercare facilities.

Open Letter: COVID-19 Study and Recommendations Task Force Established Pursuant to Massachusetts Bill H.4672

Pioneer hopes the members of this important task force will be appointed as soon as possible and that they will look into recommendations to address Covid-19 among the aged and in the state’s nursing homes. Read our Open Letter.

National Study Finds Most States Lack Healthcare Price Transparency Laws

At a time when the coronavirus pandemic has caused massive shifts in state policies on telehealth and scope of practice in healthcare, a new Pioneer Institute study underscores that most of the 50 states continue to suffer from weak laws regarding price transparency.  The study identified states that have laws that require carriers, providers or both to provide personalized cost information to consumers before obtaining healthcare services.  Fully 33 states placed in the lowest of the three broad analytic tiers on the strength of their state healthcare transparency laws. 

New Study Calls for Re-thinking Massachusetts’ COVID-19 Care Standards

Pioneer's new study raises concerns about the Massachusetts Department of Public Health’s (DPH’s) Crises Standards of Care (CSC) issued earlier this month, which bear the earmarks of a state bureaucratic effort and should be rethought under a process that includes a thorough vetting by Massachusetts citizens.

Pioneer Poll: MA Healthcare Consumers Overwhelmingly Want Price Information on Services, but Few Know How to Get It

A new Pioneer poll shows seven out of ten Massachusetts workers who get their health insurance through their employers want to know the price of a healthcare procedure before they obtain it, but most of them do not how to obtain such information, even though information is already available through their insurers’ cost estimator tools.

Pioneer Institute to Present Results of New Consumer Poll Monday at State House Healthcare Price Transparency Event

BOSTON – Pioneer Institute will present the results of a new…

Making Healthcare Prices Accessible

Today, Pioneer Institute filed a Public Comment with the federal…

Study Finds Patient Cost for MRI Largely Unrelated to Overall Price or Insurer Contribution at 14 MA Hospitals

Read coverage of this report in WCVB-TV, Boston Herald, the Boston…

Kudos To CHIA On Major Step Toward Greater Healthcare Price Transparency

Pioneer applauds the Center for Health Information and Analysis…