Everyone's health care price differs, even at the same hospital

A lot has been written about how much the cost of health care varies from one region to another — say, the difference between urban and rural hospitals. But prices also vary within one region, and even within the same hospital, based on the rates each patient’s insurance plan has negotiated.

The details: A new working paper, published yesterday in the National Bureau of Economic Research, aims to shed some light on the differences in what various insurers pay for the same services, using data from Massachusetts’ claims database.

By the numbers: On average, across a handful of common procedures, the most expensive major insurer pays about 13% more than the cheapest major insurer, the paper found.

• The cheapest plan isn’t cheaper for every service. For example, in Massachusetts, Tufts Health Plan pays about 36% less than the Blue Cross Blue Shield plan for knee replacements. For MRIs, though, Tufts pays slightly more than Blue Cross.

Why it matters: This is another illustration of just how hard it is to do anything resembling comparison shopping in health care. Even when you already have an insurance plan, competing hospitals often can’t tell you how much a common procedure will cost.

• To really get the most bang for your buck, you’d need to know what services you’re going to be in the market for, decide which hospital you’ll want to go to for those services, and sign up for the insurance policy with the lowest price for what you need.
• That’s just not feasible. And in states that don’t have claims databases like the one in Massachusetts, it might not even be possible.