It's time to flatten the variable cost of health care

What if you lived in a world where a new Toyota at one dealership cost $40,000, but the same Toyota at another dealership cost $200,000? It would seem absurd, but easy to manage. You would simply go to the dealership with the lower price — problem solved. But what if you couldn't know the price of the car until after you bought it, and you were often limited to buying from only one dealership? This is the reality for one-fifth of our economy — health care.

The cost of health care can vary greatly depending on where you receive it, with hospitals typically being the most expensive providers by far. Even within the same hospital, prices for the same service can vary widely depending on the insurer. Recent studies have reported the same hospital charging from $134 to $4,065 for the same brain CT scan. The exact same procedure, in the exact same hospital, with the exact same machine, but 30 times the cost. How does this make sense? On Long Island, prices for a lower back MRI can range from $1,580 to $9,000.

One may reasonably think that the health insurance companies would bargain away these huge discrepancies, but this is just not the case. Our health care marketplace fails on multiple levels causing patients to suffer with higher insurance premiums, exorbitant copays (based on inflated costs), and crushing medical debt. 

Two years ago, the federal government passed a law mandating hospitals disclose their prices. Initially, some hospitals chose to pay a small fine instead of complying with the requirement. Although there has been some improvement in compliance, it is unclear whether the mandated transparency has resulted in a change in actual prices, possibly because the noncompliant hospitals have the most to hide. However, state and local governments have started taking action. Last year, Colorado enacted a law stating that hospitals that were noncompliant with the federal transparency law could not go after patients for debt collections.

The New York City Council recently held a hearing where participants highlighted how rising hospital prices contribute to the increase in health care costs, impacting citizens and the city budget. Examples included hospitals charging between $2,000 and $10,000 for a colonoscopy, and some city workers’ insurance being charged over $1,000 for a single COVID-19 test.

To address these issues, the Council is proposing to create an Office of Healthcare Accountability, which would post on a public website the costs of hospital procedures at every city hospital and monitor compliance. The council also might call on the state to create an independent commission to oversee hospital service pricing throughout the state. These proposals are expected to pass, and we applaud the Council’s efforts. Citizens do not have to become ill to be affected by exorbitant health care prices — they pay it every day through their health insurance premiums. For those who do get sick, health care debt has become the leading cause of personal bankruptcy.

It is time for our health care system to prioritize cost-effectiveness and consider more affordable options, such as receiving care at a doctor's office instead of a hospital for certain procedures like colonoscopies. We must approach health care spending with the same level of financial responsibility that we apply to other aspects of our lives.

This guest essay reflects the views of Dr. Jeff Vacirca and Dr. David A. Eagle, chief executive officer and chair of legislative affairs and patient advocacy, respectively, of New York Cancer & Blood Specialists.