Hospital Charges $10,000 for a Basic Cholesterol Test

Monday, August 18, 2014

A new study of California hospitals found wildly different pricing for 10 basic blood tests, including a cholesterol check whose price ranged from $10 to $10,169.

Researchers, led by Dr. Renee Y. Hsia at the University of Southern California, San Francisco, concluded that the “arbitrary nature of the charge-setting process” made it hard for “patients to act as true consumers in this era of ‘consumer-directed healthcare.’ ”

The report, published in the British Medical Journal Open, began by quoting former Department of Health and Human Services Secretary Mike Leavitt: “Americans know the price of almost everything they pay for, except for one of the most important things they pay for—their healthcare.”

That’s a problem, because choice is supposed to be the key to a market-driven system that lets consumers pick their doctors, hospitals and level of care.

The models used by the researchers, which considered hospital and market-level variations in 2011, could only account for 21% of the differences at the 160-180 hospitals studied. That bodes ill for anyone trying to make an informed decision, while counting on fairness and uniformity in the system. “These blood tests provide a relevant and meaningful example of the variation patients may face in the bills from their healthcare use,” the report said.

The 10 blood tests included: “basic metabolic panel, complete blood cell count with differential white cell count, comprehensive metabolic panel, lipid panel, complete blood cell count (automated), thyroid-stimulating hormone assay, creatine kinase assay, troponin assay, prothrombin time and thromboplastin time (partial).”

The smallest range, $618, was for the creatine kinase assay. The next smallest range was $6,429 for a complete blood count. The median price of the lipid panel cholesterol test, which topped out above $10,000, was $220. No test had a low price higher than $44.   

The charges reflected hospital rates before pre-payments or contractual adjustments, so insurance negotiations and payments probably reduced most costs. So why the outlandish charges? Kevin Drum at Mother Jones suggests, “No insurance company will pay $10,000 for a lipid panel, of course, so the only point of pricing it this high is to exploit the occasional poor sap with no health insurance who happens to need his cholesterol checked.”

Or perhaps it is to provide a starting point for negotiations with insurers that will net the hospital a windfall, even if only a fraction of the asking price.

Dr. Hsia also headed up a study released earlier in the year that found California child birth costs were also a crapshoot, varying by a factor of 10. The study found the cost of delivery ranged between $3,296 and $37,227 for a non-complicated vaginal birth. The disparity in costs for cesarean sections was even larger, with prices ranging from $8,312 to $70,908.

Dr. Hsia told Lena Sun at the Washington Post that county and teaching hospitals had lower prices than non-teaching, not-for-profit and for-profit hospitals. But “outside of that, one of the most concerning findings is the small degree to which any factors could explain the differences,” Hsia said.

 –Ken Broder


To Learn More:

A $10,000 Blood Test?!? Yes, Really. (by Lena H. Sun, Washington Post)

A California Hospital Charged $10,000 for a Cholesterol Test (by Kevin Drum, Mother Jones)

Childbirth Crapshoot: Hospital Charges Vary by a Factor of 10 (by Ken Broder, AllGov California)

Variation in Charges for 10 Common Blood Tests in California Hospitals: A Cross-Sectional Analysis (by Renee Y. Hsia, Yaa Akosa Antwi and Julia P. Nath, University of Southern California, San Francisco and Indiana University-Purdue University at  Indianapolis, Indiana)

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