At Some Hospitals, Widely Different Costs For Same Services

By Sarah Birnbaum

May 27, 2011

BOSTON —  A Cesarian section at Cambridge Health Alliance costs $5,000. The same procedure at at Massachusetts General Hospital costs $10,000. 

A new report from the Patrick administration says such cost variations are not uncommon in Massachusetts. The study analyzed insurer payment rates to Massachusetts hospitals and found huge price disparities for common procedures, even though there was little or no difference in quality.

The findings mirror a report issued last year by Massachusetts Attorney General Martha Coakley's office. She determined that large brand-name hospitals can command much higher prices from insurers, because they enjoy significant market clout.

The variation in hospital and physician payment rates is becoming a central issue as the legislature takes up Gov. Deval Patrick's proposals to control health care costs.

Patrick's Health and Human Services Secretary, Judy-Ann Bigby, told the Boston Globe that the study demonstrates the need for passage of the governor's bill, which would require state officials to examine whether teaching hospitals and hospitals that serve poor patients have higher costs that justify higher prices.

But others say the findings raise doubts about whether Patrick's plan would work. His bill encourages doctors and hospitals to combine into larger healthcare organizations. Some healthcare economists say if hospitals and doctors join forces, they'll just have more bargaining leverage, which could further drive up the cost of healthcare.

Price Variation Report


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