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Patients pay less for brain MR scans at for-profit hospitals than nonprofit and public hospitals: study

by John R. Fischer, Senior Reporter | March 30, 2023
Insurance MRI
Nonprofit and government hospitals charge 25% more for brain MR scans than for-profits.
For-profit hospitals charge 25% less for brain MR scans than nonprofit or public hospitals, according to a new study that questions the regional marketing power of different types of healthcare institutions and their compliance with the Hospital Price Transparency Rule.

As of 2021, U.S. hospitals are required to disclose standard and negotiated discount pricing for common health services for patients so they can compare and choose the most affordable, quality care for their needs.

In a study examining data from 2,630 hospitals, researchers at Johns Hopkins Bloomberg School of Public Health found that for-profits charged a median price of $1,509 for a brain MR scan, compared to $1,938 and $2,149 at nonprofits and government hospitals, respectively. Medicare paid $400 or less for each procedure depending on the facility type.
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According to their findings, which were derived from data collected with the Turquoise Health platform, nonprofits, teaching hospitals and providers in more affluent areas had higher markups, a lower proportion of Medicare patients and were more likely to employ clinicians in MR departments. Those that disclosed prices also tended to be larger and nonprofit, system-affiliated, teaching hospitals in urban and affluent areas, and contracted with 16 different commercial plans for brain MR imaging.

Additionally, rural hospitals charged $363 more for brain MR scans than urban hospitals that were part of the same health system.

“Across the nation and within the same state, referral region, or health system, hospitals located in rural areas, contracting with more health plans, or treating more Medicare patients had higher prices, potentially reflecting these hospitals’ stronger bargaining power compared with insurers in their local markets,” wrote the authors.

According to the Semi-Annual Hospital Price Transparency Compliance Report, released in February by nonprofit PatientRightsAdvocate.org, most hospitals are still concealing their actual prices from consumers more than two years after the Hospital Price Transparency Rule was implemented, with only 24.5% of the 2,000 largest U.S. hospitals fully complying.

Commercial pricing for a brain exam was about $2,268 on average, with an interquartile range of $1,024 to $3,197, according to the Johns Hopkins researchers.

State, referral region, and health system characteristics also affected price variation across hospitals by an additional additional 16%, 23%, and 36%, respectively.

The authors note that there were several limitations within their study, including the fact that results were confined to brain MR and could have been influenced by omitted variable bias, estimation errors (time gaps among measuring variables), and data reporting and compilation inaccuracies.

There also was a lack of information on the applicable time period of each hospital price, as well as potential sample-selection biases, since there was no pricing information from non-disclosing hospitals and because hospitals with missing information on any variable in the regression model analysis were excluded.

"These biases potentially affect the generalizability of results," they wrote.

The findings were published in JAMA Network Open.

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