Price Variation in Healthcare is Killing US

In our book, Healthcare is Killing Us: The Power of Disruptive Innovation to Create a System that Cares More and Costs Less, we show how prices for the same healthcare procedures vary across the US.

These are just a few comparisons:

Heart failure

from $7,304 - $173,250

Total hip replacement

from $11,100 - $105,000

Pneumonia (simple case)

from $5,093 - $124,051

Appendectomy

from $1,529 - $186,955

Knee replacement

from $24,000 - $47,000

Endoscopy

from $600 - $7,700

But the situation is even worse. Prices for the same procedure vary considerably within the same metropolitan area. Here are a few examples:

Lower joint replacement in Dallas

from $42,632 - $160,832

Lower joint replacement in Washington, DC

from $30,000 - $69,000

COPD in New York City

from $7,044 - $99,690

Knee replacement in Miami

from $27,115 - $44,237

Lower back MRI in San Francisco

from $475 - $6,221

Pregnancy ultrasound in Cleveland

from $183 - $522

This level of price variation is simply outrageous.

Thankfully, some organizations have decided to be more transparent. One example is the Surgery Center of Oklahoma (SCO), which lists prices for more than 200 outpatient procedures on its website—including everything from plastic surgery to a hip replacement. There is no bait and switch; the price you see is what they charge and it is generally much less than the average across the country. For example, the average cost across the United States for a Hysterectomy is $38,000. But the SCO performs the procedure for $8,000. And their safety/quality and clinical outcomes are as good as, if not better than, most hospitals.

If you had to pay for this procedure out of your own wallet and knew this price information, where would you choose to go?

The SCO has a 32,535 square foot, state-of-the-art, multi-specialty facility which is owned and operated by over fifty of the top surgeons and anesthesiologist in central Oklahoma. Business is booming because of the quality of what they do, because they listen closely to their customers, and because they tightly control the cost of every aspect of their business. This and the transparency of their website pricing attracts customers from all over the United States and Canada.

It is time for US as consumers to demand price transparency for every aspect of healthcare. It is time for US to start shopping around for our healthcare needs. If enough of US, including companies and state agencies, begin to demand to know what our care will cost, and shop around for the best value, the market will begin to work its magic on reducing the cost of healthcare. Yes, even healthcare. We as individuals and as a nation can't afford not to.