Private payer's prices highest in upper Midwest and Southeast, price transparency study finds

Payers' negotiated prices for office visits and medical services can vary widely from county to county, according to a price transparency study published Oct. 27 in JAMA Health Forum.

The study is one of the first of its kind. The researchers analyzed public pricing data from Humana for seven services that occurred in October 2022. They noted that they analyzed Humana's provider network specifically because of its national scope and the ability to quickly parse its data files.

The researchers analyzed data for Humana's in-network clinicians and facilities nationwide, and used the mean posted price when the data included multiple contracted rates for the same procedure and clinician or facility within the same network. The data reported rates for clinicians and facilities regardless of whether they actually performed a given service. The researchers used 2019 Medicare claims data and commercial claims data from RAND Corp. to match the providers who performed services to their national provider identifiers. 

The seven procedures studied were an established patient office visit, high-severity emergency room visit, colonoscopy, lipid panel, lower-extremity MRI, hip arthroplasty, and CT of head or brain without contrast.

Five key takeaways:

1. On average, Humana paid providers $99 for a patient office visit, but payments ranged from $69 to $114 nationally.

2. Average county-level prices were generally lowest in the central U.S. and Florida. 

3. Prices were higher on average in the upper-Midwest and Southeast. 

4. Many higher-priced counties border lower-priced counties. Similar geographic patterns were observed for other procedures.

5. Future studies could examine the underlying causes of the price variations. According to the researchers, it is unclear whether the prices are associated with value, or whether prices reflect imbalances in market power and negotiation leverage.

"If price variation reflects clinical or perceived quality variation, purchasers and policymakers need to find balance between receiving higher-quality care and spending financial resources elsewhere," the researchers wrote. "However, if price variation is driven by consolidation or anticompetitive contracting, then regulators should design policies that ensure competitive health care markets. The factors determining price variation are likely in the middle of these two possibilities."

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