Is Your Provider Charging Patients Too Much?

Is Your Provider Charging Patients Too Much?

Consumers overspent $18.5 billion on diagnostic imaging in 2017, according to a UnitedHealth Group (UHG) research brief, released May 23. The health insurer attributes the overspending to price gouging by some providers.

Echocardiograms in 2017, for example, cost patients anywhere between $210 and $1,830, according to the brief. The average was $480, but UHG says over half of all consumers “pay considerably more for exactly the same service.”

“Reducing higher prices to amounts already agreed to by many providers can help lower the total cost of healthcare,” UHG said in a news release.

Repricing Would Save Billions

UHG illustrates in the brief the issue of price variation by addressing seven groups of common diagnostic tests, including:

  • Magnetic resonance imaging (MRI)
  • Ultrasound
  • Computed technology (CT)
  • Pathology
  • Microscopic exam
  • Radioisotope scan and function studies
  • Mammography

Spending on these diagnostic tests totaled $37.4 billion in 2017. MRIs accounted for 26 percent of that figure, or $9.7 billion, in 2017. If providers had charged the median price across the board for these diagnostic tests, UHG and its members could have achieved $18.5 billion in savings.

“By reducing price variation, many patients would pay less out-of-pocket costs and health insurance premiums could be lower,” UHG states in the brief.

Why the Price Variations?

In looking at what causes these price variations, UHG says geographic cost differences have relatively little impact, and prices are not predictive of provider quality or patient outcomes.

“Rather than cost or quality primarily driving price variation, a more likely reason is that health care providers generally are incentivized to use their market power to increase prices, often resulting in overpriced services,” UGH concludes in the brief.

Renee Dustman
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Renee Dustman

Executive Editor at AAPC
Renee Dustman, BS, AAPC MACRA Proficient, is an executive editor at AAPC. She holds a Bachelor of Science degree in Media Communications - Journalism. Renee has more than 20 years experience in print production and content management. Follow her on Twitter @dustman_aapc.
Renee Dustman
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Renee Dustman, BS, AAPC MACRA Proficient, is an executive editor at AAPC. She holds a Bachelor of Science degree in Media Communications - Journalism. Renee has more than 20 years experience in print production and content management. Follow her on Twitter @dustman_aapc.

3 Responses to “Is Your Provider Charging Patients Too Much?”

  1. L says:

    Hi. Wanted to note that the above article refers to echocardiograms as “EKGs” but those are actually two completely different tests. Regarding the UHG brief, I’m not finding any identification in there of what types of providers these prices were collected from—physician offices vs. hospitals vs. freestanding diagnostic facilities vs. other? As we all know, the actual cost to perform a service is greatly affected by the type of facility and on the type of Medicare/Medicaid reimbursement structure the facility must function under. The brief is also unclear regarding whether the prices collected were all for a global echocardiogram vs. being for only for the professional or technical component. If there is a provider out there who performs a global echocardiogram for a price of $210, could someone please refer me immediately? Also, the UHG brief refers to “prices paid by UnitedHealthcare’s commercial health plans and their members” but in fact providers who are contracted with UHG are not paid based on “price” but rather based on the “allowed amount” assigned by UHG for the specific service. In summary, the UHG brief is vague and misleading with what appears to only be an objective of accusing providers of price-gouging. It is this type of propaganda that perpetuates continued misinformation among patients. I’m not a general enemy of insurance companies but they do need to own up to their share of the responsibility in why our U.S. healthcare costs are so high.

  2. L says:

    Hi. The article above refers to echocardiograms as “EKGs” but those are two completely different tests. Regarding the UHG brief, I don’t find any indication in there as to what types of providers provided the pricing info UHG collected—physician offices vs. hospitals vs. freestanding diagnostic centers vs. teaching facilities vs. other? As we all know, the true cost (not price but cost as a factor that affects pricing) to perform a service varies widely depending on the type of facility it is rendered in, much due to the varying Medicare and Medicaid reimbursement structures that apply to each type of facility. The brief also doesn’t clarify whether the pricing info UHG received was for a global echocardiogram vs. for the professional or technical component only. If there is a provider in the U.S. who performs a global echo for $210, please refer me ASAP. :) If UHG is perhaps comparing pricing for the separate echo components to pricing for the global service, then their data is without value (apples to oranges, as they say). The brief is too vague to present a persuading argument one way or another but certainly seems written with the prime objective of vilifying physicians in general with an accusation of price-gouging. The brief also refers to “prices paid by UnitedHealthcare’s commercial health plans and their members” but do UHG or their members every pay the actual “price” for a healthcare service? If a provider is contracted with UHG, then what the provider can charge is capped by the allowed amount set by UHG, which is less than the provider’s price. This UHG brief is the type of misleading propaganda that perpetuates misinformation among the public and promotes divisiveness among the various key players in the healthcare industry. I’m no enemy of insurance companies but I do believe the time has come for them to stop the blame game and own up to their part of the responsibility for our high healthcare costs. Jeers to UHG on this one—please publish some consistent and viable data if you really believe “greedy physicians” are to blame for all our healthcare woes. Unfortunately, the truth is that our healthcare problems in the U. S. are way more complex than that. Interesting how UHG doesn’t mention how they would benefit if they were to force provider prices down because in turn they could then more easily lower their allowed amounts for services and reap more profits. But I guess telling the whole truth wasn’t their objective in this particular brief.

  3. Diane Carl says:

    This also occurs when hospitals purchase physician practices. I was charged four times as much for a knee x-ray, from a hospital employed Orthopedic Surgeon, as I would have been if I went to a private practice. When I called the insurance carrier to question the allowed amount, I was told it was the price the hospital had negotiated and the practice was considered “overpriced”. In the days of high deductibles and co-pays, this is causing patients to forego necessary medical care. These additional fees should be disclosed prior to care.

    In addition, my elderly father sees a hospital employed Internist, whose office is located within a hospital owned building. He is being charged an additional facility fee, which Medicare advised us was allowed. This increased his bill b 40%.

    Let the buyer beware!

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