Survey Shows Wide Variation in Both Overall Cost of Medical Procedure and Amount Paid by Consumers

Share on Facebook

Share on Twitter

Share on

LinkedIn

Making all-payer claims data public could put downward pressure on high-cost providers, reduce overall healthcare costs

BOSTON – Data from the Massachusetts Center for Health Information and Analysis (CHIA) show wide variations in the prices agreed to between individual insurers and providers, the portion paid by insurers and the amount that is consumers’ responsibility to pay, according to a new policy brief published by Pioneer Institute.

In “Need an MRI? In Worcester, Patients Pay Less for More,” author Scott Haller looks, by county, at various costs associated with a simple MRI of the knee. The data in the brief come from CHIA’s all-payer claims database (APCD), which warehouses medical claims data across the Commonwealth.

Download "Need an MRI? In Worcester, Patients Pay Less for More"

“Through CHIA, the state collects data that provide a window into the true cost of healthcare among various providers,” said Pioneer Executive Director Jim Stergios. “In an era of high-deductible plans, the state must make this information easily available to businesses and consumers. Without it, they cannot make smart choices about their medical care.”

Average “allowed amounts,” the price for a particular procedure agreed to between specific insurers and providers, ranged from $299 in Worcester County to $1,787 in Nantucket. The average amount paid by insurers went from a low of $213 in Worcester to $1,571 in Nantucket, and average consumer out-of-pocket costs varied from $60 in Worcester County to $176 in Berkshire County.

There were large price variations both between and among counties. Maximum out-of-pocket costs were $744 in Essex and Plymouth Counties, compared to $4,479 in Barnstable.

Data showing comparatively higher out-of-pocket costs in rural counties like Berkshire, Franklin, Nantucket and Hampden, which had the highest average out-of-pocket costs, suggest that high-deductible insurance plans are more common in those areas.

While Suffolk County had the fourth highest average allowed amount, its out-of-pocket average was third lowest among the 13 counties included in the brief (there is no MRI machine in Dukes County, more commonly known as Martha’s Vineyard), which suggests the prevalence of more generous insurance plans.

With both the lowest allowed amount (about $299) and out-of-pocket costs (around $60), patients in Worcester County appear to be getting the best overall deal in Massachusetts.

The brief also calls for making the APCD public. “Anyone with a deductible or co-insurance could save money if prices were readily available for comparison,” Haller said. “If enough consumers start shopping for their healthcare, it would put downward pressure on high-priced providers, leading to lower premiums and overall healthcare costs.”

About the Author

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

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 accountable government.

Get Updates On Our Healthcare Cost Transparency Initiative!

Related Research:

Massachusetts Should Disclose More Information about Its Recent Reduction in the Official Count of Long-term Care Deaths

April 27, 2021

The public -- particularly in Massachusetts, where COVID-19’s toll on elders has been so great -- has a right to know how many deaths occurred in state-regulated eldercare facilities, and how that compares to the total number of deaths. But the state's new counting standard clouds this information, and should be corrected or at least disclosed.

Doctor Heal Thyself: Insider’s Prescription For Healthcare Reform

April 6, 2021

Host Joe Selvaggi talks with surgeon and New York Times bestselling author Dr. Marty Makary about the healthcare reform themes in The Price We Pay, the 2020 Business Book of the Year. The discussion covers the value of price transparency, provider accountability, and performance information to drive better medical outcomes and improve doctor and patient satisfaction.

Pioneer Institute’s 2021 Government Transparency Resolutions: Sunshine Week Edition

March 16, 2021

As it does each year, Pioneer shares the resolutions it hopes state leaders will adopt to bring government actions into better focus and invigorate our democracy with heightened public engagement. As the late Supreme Court Justice Louis Brandeis noted, “sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”

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

October 28, 2020

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.

Getting Nursing Home Care Right

October 8, 2020

Pioneer Institute has long recognized that seniors deserve the best of care and that innovative policy solutions are necessary to ensure that this population enjoys a high quality of life in their later years. In the 1990s, early 2000s and most recently in 2017, the Institute dedicated Better Government Competition topics to policy issues related to aging in America. Our goal each time was to find solutions and to take advantage of new innovations that would improve the quality of life and care for the elderly.

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

August 10, 2020

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.

HHS COVID Funding Tracker

August 3, 2020

As of July, the Feds have distributed $86.7 billion to medical providers, of which $2.3 billion came to Massachusetts. Pioneer’s new HHS COVID-19 Funding app shows who and how much, from the $1 sent to American Current Care of Massachusetts, to the $418,034,675 sent to the MA Department of Public Health. We also break down the distribution by city or town.

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

June 28, 2020

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

June 28, 2020

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

May 7, 2020

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

April 15, 2020

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

November 4, 2019

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.