Massive Price Differences Found At Minnesota Hospitals

Employers and the Minnesota Department of Health have joined together to add some price transparency to the hidden world of health care costs. A new report of actual prices paid for a set of four different common procedures at Minnesota hospitals found huge swings in prices depending on which hospital a patient selected.

For example, while the average price paid for a knee replacement in Minnesota was $23,997, the range in prices paid to Minnesota hospitals between July 2014 and June 2015 was as low as $6,186 to as high as $46,974, according to health officials. This represents a nearly eight-fold difference between the lowest and highest-priced hospitals.

Likewise, the average price for a cesarean section delivery was $10,234, with the low price of $4,693 and the high average price of $22,831, a nearly five-fold difference.

“This is eye opening information for the purchasers of health care,” Carolyn Pare, president and CEO of the Minnesota Health Action Group, said in a statement. “Employers have long suspected that there is a great deal of variation in both the quality and the cost of health care, but to be able to see the actual numbers provides them an opportunity to make better purchasing decisions. Employers can also help employees and their family members identify and access more affordable care.”

The new report, based on commercial payer data only, is the result of employers teaming up with state health officials to identify new ways to use the Minnesota All-Payer Claims Database to better understand what’s happening in health care across the state.

Information from the report can help employers ask questions about choosing high-value networks that are characterized by high quality care and competitive prices, the health department said.

The Minnesota Department of Health plans to publish prices for other common hospital procedures, such as heart procedures or back surgery, in 2018.

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