Report: Minnesotans paying vastly different prices for same surgeries

Price differences of tens of thousands of dollars, even in same hospital

Adam Carter
August 09, 2018 - 5:00 pm

Patients in Minnesota pay vastly different prices for the same surgeries. according to a report issued Thursday by the Minnesota Department of Health.

The report found that a patient undergoing a surgical procedure may pay as much as two to seven times as much as another patient for the same surgery, sometimes at the same hospital.

The health department's study examined four common procedures at Minnesota hospitals from July of 2014 to June of 2015. As an example, for one of the procedures examined, spinal fusion surgery, the prices varied by a factor of nearly seven.

Stefan Gildemeister is the state health economist for the Department of Health.

"The lowest was price (for spinal fusion surgery) was $12,300, the highest price, almost $81,000, so that's a tremendous variation."

Even at the same hospital, researchers found major price differences.

"Delivering the same services, likely with the same team of surgeons, same sort of equipment, and nursing staff, you have variations in one hospital of between $25,800 and $80,790," said Gildemeister.

While the focus of the study was to look at price differences, the reasons behind those variations needs further examination.

Still, Minnesota's health commissioner says there is a clear need for more transparency when it comes to the healthcare industry.

"The degree of variation shows that the health care market lacks meaningful transparency and a consistent link between cost and prices," said Jan Malcom, Minnesota Commissioner of Health. "This undermines effective competition and rational pricing of health care services."

The health department says national studies provide other reasons for such varied prices, such as differences in labor markets, operating costs, hospital and patient characteristics and practice styles.