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It's the prices, stupid

Kaiser Permanente CEO George Halvorson:

The point is that CT scans in this country cost a multiple of what everyone else pays. It costs a few hundred dollars in Europe and over $1,500 here. You can't find a place in Europe than costs $1,500. You can't find a place here that costs less than $1,500. Anyone who is looking at the cost of care and is not looking at the unit cost of care is missing the point. ... To have a health care debate in this country that isn't aware of the price differential is not an informed debate.

You can read the academic version of this argument here.

Correction: I'd heard $15,000, but Halvorson said $1,500. I've corrected in the text.

By Ezra Klein  |  October 27, 2009; 11:38 AM ET
 
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Comments

I don't know if charges are higher in the US compared to Europe, but the quote about $15000 CT scans is ridiculous. My radiology practice charges under $500 for a CT scan of the head or chest, as do most other private radiology groups in Minneapolis. Some hospitals charge more, but the correct information is readily available from health insurance companies.

http://mainstreetmedica.com/procedure.aspx?id=23

Please try to publish accurate information about medical costs.

Mark C. Oswood, MD

Posted by: drdr2 | October 27, 2009 12:09 PM | Report abuse

$500 sounds pretty cheap. I think the allowable for the ones I've had are around $1500, but I don't even know what the billed charges are on that, could be several thousand dollars.

Posted by: consid24 | October 27, 2009 12:19 PM | Report abuse

Once again its clear to anyone paying attention that we really have a cost problem in this country that the democrats want to pretend is an insurance company. And this bill does absolutely nothing to deal with the cost problem.

Posted by: spotatl | October 27, 2009 12:24 PM | Report abuse

Ezra: are you going to weigh-in some more on Reid's bold move yesterday? I'm thinking specifically of the vote situation. Do you think he's got sixty? If not can he somehow get them? I like the opt-out P.O., but not at the price of not getting a bill to conference. I was wondering if you can talk me down.

Posted by: Jasper99 | October 27, 2009 12:25 PM | Report abuse

I agree with Dr Oswood that the number they use of $15,000 is too high but I'd also ask if she's looking at just the cost of her part of the procuedre and not the total costs. Agreed that it costs more to do it at a hospital but many times radiology centers don't participate with insurance so for those of us with insurance we can either take the $500 cost from their office or the $200 copay from having it done in my plan for example. The idea should be the providers and insurers should get together and come up with a reasonable cost to have these procedures done there as opposed to a costly hospital and leave the hospitals for surgical procedures that are done there for a reason.

Posted by: visionbrkr | October 27, 2009 12:53 PM | Report abuse

visionbrkr might be pointing out some of the discrepancy, between the cost of the scan itself and the cost of the radiologist's reading. I don't know what other parsing of costs might be in there. Last spring I had an appendectomy and the bill from the hospital listed the "CT scan" at $4,000. That apparently included the radiologist's time since there was no other line item for that. The scan, writ large, was the most expensive part of the entire medical adventure, more than either the surgery or anesthesiology, which I would have guessed would be the things to top the list.

Posted by: JonathanTE | October 27, 2009 2:05 PM | Report abuse

Thanks for the correction. There are some common combinations of CT scans which are charged at $1500 or more in some centers (combined chest/abdomen/pelvis would be an example).

Posted by: drdr2 | October 27, 2009 5:15 PM | Report abuse

spotatl | October 27, 2009 12:24 PM
"Once again its clear to anyone paying attention that we really have a cost problem in this country that the democrats want to pretend is an insurance company. And this bill does absolutely nothing to deal with the cost problem."

....
You are incorrect on $300 billion reasons. Health insurance payments are rising faster than the inflationary cost of medical care.

The gap between what insurers take in and what they pay out is between $300-450 billion a year, between 20-30% of every private insurance dollar.

Eliminating every lawyer would save 1%. Removing all illegals from the US would save 2%.

The evidence can't be any clearer that the largest problem is insurance.

Posted by: boscobobb | October 27, 2009 9:11 PM | Report abuse

Over 7 years I've paid $1,400 to $1,500 for CT scans in an emergency room for a family member's very rare migraine headaches. I distinctly recall the bills as one insurer denied coverage, so I paid it. The second insurer covered part of it. This did not include radiologist fee.

My observation, as a medical device entrepreneur, is that facilities in the same trade and same market mark up their services at very different rates.

Perhaps this is due to their distinct financial models, or perhaps it's due to ownership of the devices. If a clinic buys it outright, if a benefactor buys it as a donation or write-off, if it's leased from GE Capital Leasing, if it's bought by a medical group and then provided on fee-based service model, charged by CPT procedure, charged by hourly usage, etc.

Posted by: boscobobb | October 27, 2009 9:24 PM | Report abuse

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