Health Care In The States

The Price Is Right There In Front Of You, In Colorado At Least

By Eric Whitney

November 2nd, 2012, 9:09 AM

The price of a knee MRI in Colorado varies from $350 to $2,336. It’s a huge gap, but it’s also remarkable that the prices themselves are known at all.

Prices for health care aren’t public in most states, making shopping for the best deal nearly impossible. Different patients pay different prices for the same procedures based on their insurance coverage, and even the doctors who order the tests are often unaware of the price variations.

But about a dozen states have now established health care price databases to help people shop and compare. Colorado is the latest, launching its Thursday, the same day a consortium of major health care purchasers (including Wal-Mart, GE and the AFL-CIO) issued a manifesto demanding more price transparency.

Providers, payers and government in Colorado agreed to build the new foundation-funded database to try to drive costs down. “This is absolutely vitally important if we’re going to realize the magic of the market to improve outcomes in the marketplace,” says Jonathan Mathieu, director of data and research at the Center for Improving Value in Health Care in Denver, which is maintaining Colorado’s database.

Right now, it’s only partially complete. It will be about a year before consumers can easily plug in a given medical procedure and get a price quote.  But preliminary data are shedding light on how much prices vary.

The eight-fold range in MRI prices stands out, as does a four-fold difference in spending per health plan member between nearby counties. It ranges from a low of $1,000 per year in Hinsdale County to a high of just over $4,000 in Pitkin County.

For now, Colorado’s database isn’t naming specific hospitals or providers along with the prices. Phil Kalin, president of the foundation that runs the database, says that’s because they want to give providers a chance to vet the data and analyze it anonymously at first.

“No gotchas,” Kalin says, “we’ll name names later.”

The Center also doesn’t want to name names until the database is more complete. Right now it only has information on what Medicaid and the state’s eight largest insurers are paying, which covers about half of Colorado’s insured population. Over the next year it will add data from Medicare and other private payers, encompassing 90 percent of all covered Coloradans.

This story is part of a collaboration that includes Colorado Public Radio, NPR and Kaiser Health News.

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