New Research Finds Shocking Increase in Health Care Costs among Cities with Fewer Hospitals

Motion Blur Stretcher Gurney Patient Hospital EmergencyThe cost of health care in the U.S. has been under heavy scrutiny in the past several years, and recent findings suggest that the price disparities between hospitals may be even more extreme than consumers realize.

According to Time, a new study has found that the number of hospitals in any given region plays a central role in determining the cost of certain procedures. Additionally, patients on one end of the country “routinely” might have to pay up to eight times more than someone elsewhere for the same exact treatment.

The research analyzed approximately 2.92 billion health insurance claims for 88.7 million Americans. Within the same city, hospitals would routinely charge three times more than other hospitals that are just miles away.

It was concluded that areas with just one hospital had prices that were 15.3% higher than those with four or more hospitals. The results were proportionate as the number of hospitals decreased; areas with two hospitals had prices that were 6.4% higher, while the prices in areas with three hospitals were 4.8% higher.

“We have this large body of evidence covering many, many years that consistently shows if you happen to live in an area with only one hospital you are going to pay a lot more,” said Martin Gaynor, a co-author of the study.

These shocking price disparities can be partially attributed to the increased consolidation of regional hospitals. The researchers said that there have been more than 1,200 hospital mergers and acquisitions in the past 10 years alone.

Those looking for consistent and lower health care costs may be inclined to opt for urgent care instead of hospitals. According to Boston news station WBUR, a woman recently experienced this dramatic difference in price between the two entities firsthand.

Nancy, a 55-year-old former nurse, received a CT scan at Martha’s Vineyard Hospital for abdomen pain. Five weeks later, she got the same exact CT scan at a local urgent care center.

Upon contacting her insurance company to find out how much each procedure cost, Nancy discovered that Martha’s Vineyard Hospital charged $3,888.76 for the CT scan, while the urgent care center charged only $574.97.

On average, patients who unnecessarily went to the emergency room would have spent $784 less and saved nearly three hours by going to an urgent care center instead. If the recent trend of hospital consolidation continues to grow, one would assume that more patients will opt to be treated at their local urgent care center.

As for the study, Gaynor and his peers recommend “price transparency tools” to patients who wish to look up the cost of procedures before committing to a health care provider. As of today, approximately 77% of large employers offer these price-comparison resources to their employees.

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